One of the types of mortgages you may be considering if you are buying a home in Massachusetts is an FHA loan backed by the Federal Housing Administration. While you probably know a bit about FHA mortgages, there are many misconceptions about these types of home loans. Often, those misconceptions hold homebuyers back from realizing the full benefits of FHA loans. Below, we go over some things that you might not know about these types of mortgages.
FHA Loans Facts
- Repeat homebuyers can qualify for FHA mortgages. FHA mortgages are just for first time homebuyers, right? Actually, first time and repeat homebuyers can take out FHA loans. The reason so many people believe that you have to be buying your first home to qualify is because the features of FHA loans make them suitable for many people who happen to be purchasing their first homes.But since you can qualify even if you have owned a home in the past, there is no reason not to consider them if those same features fit your current situation.
- You can buy multiple types of properties using an FHA mortgage. You can purchase a single-family home using an FHA home loan, but did you know that you also can purchase a duplex or another type of multi-family property? During your consultation, we can let you know if the type of property you are interested in is eligible.
- Not just employees can qualify for FHA loans. Traditional employees can qualify for FHA mortgages, but they are not the only ones. Self-employed persons also can buy a home using an FHA loan. You can apply for an FHA mortgage with SSI or SSDI too. Child support, alimony, or money from investments can be used as income during the application process as well.
- You may not have to pay for mortgage insurance forever. It is true that FHA mortgages require mortgage insurance premiums (MIP). But depending on how much you put down when you purchase your home, the requirement may expire in the future, allowing you to continue paying on an FHA loan without paying for insurance. The key is to put down at least 10%. What if you are choosing an FHA mortgage specifically so you can put down less? In that case, you can look into the possibility of refinancing later down the road. We can discuss your options with you before you apply. That way, you can choose what is best for you now based on both present and future considerations.
- Bankruptcy, foreclosure, or student loan debt do not have to stand in your way. Quite a few applicants flat-out assume that they cannot apply for an FHA mortgage because they previously were foreclosed on or declared bankruptcy. They also might think that if they have student loan debt that will bar them from approval. In most cases, there is a waiting period after a bankruptcy or foreclosure. But after it passes, you can apply for an FHA loan just like anyone else. As for student loan debt, the current rules are much friendlier than those in the past for computing debt for the purposes of your application.
- FHA mortgages are available at any income level. Because of the relaxed credit qualifications and low down payment requirements, some people think that FHA loans may be capped at a certain level of income. FHA loans can in fact be great for those who are looking to buy a home affordably without a high income. But having a high income does not stop you from qualifying for the FHA mortgage program. There is no income cap.
- FHA loans are just one of the types of mortgages that feature low down payment requirements. There is a common assumption that if you want a low down payment, an FHA mortgage is your best and only option. But this is not true. Conventional loans can also feature low down payments with the right qualifications. And if you are a veteran, active duty service member, or eligible surviving spouse, you might be able to buy a home with zero down payment by applying for a VA mortgage.
Style Mortgage Can Help You Learn More About FHA Loans
We know that you likely have a lot of questions about FHA mortgages, and may need help figuring out whether this type of home loan is the right one to fit your needs. During your consultation, we can answer your questions in-depth and offer you personalized guidance. To get started now, please call Style Mortgage today at (508) 223-5206.
This information is intended for informational purposes only and is not an offer to lend. All applications are subject to approval.