Is An FHA Mortgage a Good Choice?

I have been a Mortgage Broker many years and have tremendous admiration for the FHA guaranteed mortgage program. In my opinion it has been a success, as it has provided affordable mortgage financing for millions of home-buyers. It was the desire of the United States government to make it to where more people would qualify for home purchase. The FHA mortgage in my opinion is an excellent value and a great way to become a homeowner. The FHA mortgage is similar to a conventional mortgage in the fact that it allows lenders to offer low fixed rates, as well as adjustable rates. The FHA mortgage requires a 3% down-payment from the home-buyer.

However, the good news is this! If the seller of the property agrees to participate, he can actually donate the down payment through an approved gift fund. This alleviates the buyer from making a down payment. Another great highlight is that the seller can also pay the buyers closing costs, as long as they do not exceed 6% of the sales price. What does this mean for you? If you are interested in buying a home and don't have the funds available for down payment and closing cost, with a willing seller, you can actually design the transaction to where you will actually bring very little or nothing to the closing table. When credit qualifying for an FHA mortgage, your credit score doesn't become an issue. However, there are credit worthiness guidelines. For instance, if you filed Bankruptcy, FHA requires that the bankruptcy has been discharged for two years or more and you have re-established credit and you are paying your debts on time. Another requirement is that you are able to provide a couple accounts on your credit history that have been paid satisfactory.

Documentation requirements are W2's from your employer or two years tax returns, Employer pay stubs covering the last 30 days and your most recent banking statements. Qualifying is much easier than you would think and far more relaxed than a standard conventional conforming mortgage program. Before you proceed, this is something you need to know. FHA underwriting guidelines are the same for every mortgage lender. However, some lenders are much more willing to approve your FHA mortgage than others. Be sure when you choose a mortgage company they are an FHA approved company, as well as be certain that your loan officer has a lot of experience in FHA loans. This is a must and will prevent disappointment to you. Choosing the mortgage company is your decision and privilege. I hope that you find this article informative and possibly it helps you make an informed decision when you decide to become a homeowner. Good luck!

The author of this article is Glenn Keller of Bretlin Home Mortgage of Florida. Glenn is a veteran of the mortgage industry and has years of experience in providing conforming, non-conforming, FHA and VA mortgages to home-buyers and homeowners in Florida and Georgia. To learn more, visit his website at http://www.bretlinfloridamortgage.com.

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