What You Need to Know about an FHA Loan and the New Available Options
It's easy to get overwhelmed as a potential buyer or feel like you'll never be financially ready to get a mortgage and buy a home.
But there's more than one path to homeownership and a variety of home loan products that can help make it happen. One of those is an FHA loan. Here's how they work, and what's new and different about them.
An "FHA" insured loan is a US Federal Housing Administration mortgage insurance–backed mortgage loan that is provided by an FHA-approved lender.
Because it is insured, this type of loan provides more protection to the lender. If a borrower defaults on an FHA loan, the government will compensate the lender for their losses.
An FHA loan allows a lender to make loans that might be considered a little riskier, helping borrowers who might not qualify for conventional loans.
There are several types of FHA loans, but the most common is a 203(b) basic home mortgage loan.
How to Secure an FHA Loan
There is certain criteria you must meet to qualify for an FHA loan, including:
- Have verifiable income
- Be able to afford the housing payment and any existing debt
- Have at least a 3.5% down payment
- Have an established credit history
- Have a FICO score of at least 580-640
- Purchase a home that does not exceed FHA loan limits
- Apply for the correct type of FHA loan
Today's FHA loans have many advantages for not only prospective buyers, but also current homeowners who can now qualify to refinance their loan and take advantage of competitive rates. Lennar Mortgage’s Loan Officers believe that there's no such thing as a one-size-fits-all mortgage and can help you learn more about home loan options that are the perfect fit for you.