Wondering if it is going to be a struggle to find an FHA loan with bad credit? Let’s check out the article!
Did you know that FHA loans ease the way for getting a mortgage without hassles? First-time homeowners have a difficult time getting a home loan as they cannot put down a large amount. Because of financial obstacles, their dream of ownership nearly comes to an end. However, FHA loans make an affordable choice, thanks to the flexible requirements. From low credit scores to low down payments, homebuyers can have an easy go at it. In order to find out whether the FHA government home loans for bad credit in Texas are suitable for you, it’s important to keep a few things in mind.
FHA loans are government-backed programs that can help you invest in a home with less-stringent requirements. You can qualify for an FHA loan when you have a low credit score or debt. You can also apply for FHA loans with a history of bankruptcy. So, let’s check out the necessary things you should know about FHA government loans for bad credit.
Getting an Understanding of FHA Loans
The Federal Housing Administration backs the FHA loans and FHA is a unit under the Department of Housing and Urban Development. If you default on the loan, the lender will be reimbursed. You can find low down payment options for FHA loans; moreover, the low credit score requirements are additional benefits. Remember, you do not need to be a first-time buyer to qualify for FHA loans — repeat buyers are also welcome. You can compare credit score requirements and find out the lender who accepts lower down payments.
A Glance at How FHA Loans Work
You can apply for a 30-year or 15-year FHA loan with fixed interest rates. The FHA allows flexible underwriting guidelines so that borrowers get a chance to qualify for a home loan. However, private mortgage insurance is always added to FHA loans. If borrowers cannot afford a 20% down payment, mortgage insurance is applicable. Now, you need to remember that there are annual mortgage insurance premiums and upfront mortgage insurance premiums.
Nevertheless, the mortgage insurance premiums get canceled upon the completion of 11 years. Also, lenders cannot charge more than 3%-5% of the mortgage amount in closing costs.
If you want to know how you can qualify for FHA loans, you should contact Clear Lending. From the credit score requirements to private mortgage insurance — the experts at Clear Lending can help you at every step. For more information, call Clear Lending now!
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