Government loans can be a great option for a home loan for many repeat and first time homebuyers, and even refinances. They offer softer guidelines where conventional and portfolio loans are strict. Check out how these programs differ and might be the right fit for you.
What is the right loan for you?
FHA loans currently make up about 28% of all transactions in the US. There are several reasons for this: 1) good interest rates, 2) lower credit score requirements, 3) low down payment of 3.5%. For the average American, these terms have attracted many buyers and current owners to look towards FHA as their financing choice.
Other features of FHA:
In many cases, FHA is avoided because of the mandatory monthly and upfront mortgage insurance premiums. However, as FHA becomes more profitable, they have lowered these premiums in the last few years to compete with the conventional Fannie Mae and Freddie Mac loans to the point where a borrower with a below average score could have a lower overall payment with FHA than the equivalent conventional loan.
Contact us to see if a FHA loan is the right choice for you.