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Trying to buy a home affordably without a perfect credit score or a lot of money for a down payment may feel like a challenge. But it doesn’t have to be. The FHA mortgage program was created specifically for first time homebuyers and others in this situation.
You can qualify for an FHA loan even without a perfect FICO score, and you only need to put 3.5% down on a home.
The FHA loan program is a government-insured lending program backed by the Federal Housing Administration (FHA). When you take out an FHA mortgage, the Federal Housing Administration guarantees it.
Since the lender is protected should you default, you can qualify more easily for more favourable terms.
Check out some of these Colorado FHA Loan advantages:
Move into a new home now without a large down payment. The down payment for an FHA loan is between 3.5% and 10%. If your score is 580 or above, you qualify for 3.5% down. If it is between 500 and 579, you qualify for 10% down.
Credit qualification for this type of loan is relaxed compared to requirements for conventional financing.
Debt-to-income (DTI) ratio requirements for an FHA mortgage are likewise not as strict.
FHA mortgages have more affordable interest rates than comparable conforming loans with no government insurance.
Closing costs, when not paid for by the seller, have a low cap.
Home purchase is not the only thing you can do with an FHA loan. You can also build a home, repair or upgrade one, or refinance a loan.
FHA loans can have fixed or adjustable mortgage rates.
If you are excited by the prospect of a low down payment, affordable mortgage rates, and low closing costs, you are probably wondering whether you can get an FHA loan.
You do not need to be a first time homebuyer.
You must be purchasing or refinancing a primary residence, not a second home.
The minimum credit score required is 500.
Your debt-to-income (DTI) ratio must be no higher than 56.9%.
Document that you have been employed steadily for the past two years and that your professional life is stable.
A clear credit alert interactive voice response system (CAIVRS) report is a must.
Be ready to pay for private mortgage insurance (PMI) each month.
A prior bankruptcy or foreclosure does not disqualify you after the waiting period.
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Colorado Mortgage Broker, Brian Murphy, Front Range Mortgage, LLC DBA United Mortgage Funding, LLC – Colorado Mortgage License #MB100020928 / NMLS #378844. Colorado Springs Office: 102 S. Tejon Street, # 1100, Colorado Springs, CO 80903. Denver Office: 12191 W. 64th Avenue, # 205, Arvada, CO 80004. Regulated by the Division of Real Estate http://www.dora.state.co.us/real-estate/index.htm(DORA)
Front Range Mortgage, LLC specializes in custom tailored low rate Colorado mortgage loans, debt consolation loans, second mortgages and home loan refinancing with personalized face to face service for clients in the metro Denver and front range area including Aurora, Arvada, Denver, Lakewood, Boulder, Fort Collins & Colorado Springs.