FHA for First Time Buyers
When you are out to buy your first home, it may seem there are several factors working against you. Lack of experience, lack of credit or even lack of a down payment are all problems that may prevent a first time home buyer from taking the plunge into home ownership.
However, taking the steps to purchase a home is one of the best investments you can make.
Home ownership puts a major asset in your name, offers the advantage of tax breaks and uses your income to its full advantage. Putting your money into a mortgage every month is a much smarter and more effective investment than burning your cash through a rental payment.
Still, many people continue to drag their feet on buying a home because they do not have the finances available to put down 20% when purchasing a property. The door of opportunity can be opened, however, when you start looking into the financial advantages available through a FHA loan.
FHA stands for the Federal Housing Administration and refers to the loans available to first time home buyers, partnered with a decreased down payment. The slogan of FHA is “Another American Dream Comes True”, and they work to live up to that philosophy with simple assistance for first time buyers.
With FHA, the goal is to make the American Dream of owning a home a reality for those who couldn’t otherwise afford it and with their low down payment offer, their philosophy typically works. With FHA, the down payment required on a 30 year fixed mortgage is 3%, a whopping 17% difference from a conventional 30 year loan. Typically, this loan would require a 20% down payment from the same buyer!
With this low down payment option, the ability to purchase a first time home is much more accessible to someone that may have the necessary credit to be approved for a loan, but is unable to come up with the full 20% deposit anytime soon.
At www.fha.com, you can learn everything you need to know about available the loan, but in the meantime, it’s important you are aware of the rules attached to this loan.
As already covered, you can only go after an FHA loan if you are buying a home for the first time and plan to live there, instead of (for example) rent it out. FHA also requires mortgage insurance, an additional but often nominal monthly fee added to your mortgage payment, to cover the risk of default.
Finally, each city and state has a limit to the price of the home the buyer can purchase. Typically, in an average sized city, the cap to purchase hovers around $250,000 but in a major city like Los Angeles, the cap is roughly $730,000.
If you are in the market to buy a home but fear you can’t get together a large down payment, look into your options. Thanks to FHA, the chance to own your dream home may be right around the corner.
However, taking the steps to purchase a home is one of the best investments you can make.
Home ownership puts a major asset in your name, offers the advantage of tax breaks and uses your income to its full advantage. Putting your money into a mortgage every month is a much smarter and more effective investment than burning your cash through a rental payment.
Still, many people continue to drag their feet on buying a home because they do not have the finances available to put down 20% when purchasing a property. The door of opportunity can be opened, however, when you start looking into the financial advantages available through a FHA loan.
FHA stands for the Federal Housing Administration and refers to the loans available to first time home buyers, partnered with a decreased down payment. The slogan of FHA is “Another American Dream Comes True”, and they work to live up to that philosophy with simple assistance for first time buyers.
With FHA, the goal is to make the American Dream of owning a home a reality for those who couldn’t otherwise afford it and with their low down payment offer, their philosophy typically works. With FHA, the down payment required on a 30 year fixed mortgage is 3%, a whopping 17% difference from a conventional 30 year loan. Typically, this loan would require a 20% down payment from the same buyer!
With this low down payment option, the ability to purchase a first time home is much more accessible to someone that may have the necessary credit to be approved for a loan, but is unable to come up with the full 20% deposit anytime soon.
At www.fha.com, you can learn everything you need to know about available the loan, but in the meantime, it’s important you are aware of the rules attached to this loan.
As already covered, you can only go after an FHA loan if you are buying a home for the first time and plan to live there, instead of (for example) rent it out. FHA also requires mortgage insurance, an additional but often nominal monthly fee added to your mortgage payment, to cover the risk of default.
Finally, each city and state has a limit to the price of the home the buyer can purchase. Typically, in an average sized city, the cap to purchase hovers around $250,000 but in a major city like Los Angeles, the cap is roughly $730,000.
If you are in the market to buy a home but fear you can’t get together a large down payment, look into your options. Thanks to FHA, the chance to own your dream home may be right around the corner.