FHA Loan
One of the biggest challenges for first-time homebuyers is saving for a substantial down payment. FHA loans provide a government-backed solution that makes buying a home more accessible, even with a lower down payment. Whether you're a first-time buyer or a seasoned homeowner, FHA loans can help you move closer to your dream home.
FHA loans are designed to help buyers secure financing with a lower initial investment. These flexible options may be the key to turning your homeownership goals into reality.
What Is an FHA Loan?
FHA loans are mortgages insured by the U.S. Federal Housing Administration, designed to help buyers with limited savings or credit history. Unlike conventional loans, FHA loans allow buyers to purchase a home with as little as 3.5% down.
Unlike conventional loans that require private mortgage insurance (PMI) when the down payment is less than 20%, FHA loans are backed by the federal government, so PMI isn’t required. However, buyers may encounter additional requirements during the application process due to the government’s involvement.
What Do You Need to Qualify for an FHA Loan?
To qualify for an FHA loan, you’ll need:
Down Payment: Typically 3.5% of the purchase price if your credit score is 580 or higher. Buyers with lower credit scores may need to provide a larger down payment.
Primary Residence: FHA loans are only available for homes that will serve as the buyer’s primary residence.
Credit History: While FHA loans are known for more lenient credit requirements, lenders may still ask for additional documentation to ensure financial stability.
Standard Loan Documents: Employment history, debt-to-income ratio, and property appraisal are all part of the process.
Lenders evaluate each application individually, which may allow buyers with lower credit scores or less traditional credit histories to qualify.
How FHA Loans Work
Low Down Payment: Purchase your home with as little as 3.5% down, compared to the higher requirements of many conventional loans.
Flexible Terms: Choose from fixed-rate loans with 30-, 25-, 20-, or 15-year terms, or opt for a 5-year adjustable-rate mortgage.
No Prepayment Penalties: Pay off your mortgage early without incurring additional fees.
Why Choose an FHA Loan?
FHA loans offer a pathway to homeownership for buyers who may face challenges meeting the requirements for conventional loans. With lower down payment options and more flexible credit criteria, they provide an excellent opportunity for many buyers to secure their ideal home.
Have questions? Give us a call! One of our mortgage specialists would be happy to speak with you about your loan options.
**Snap Mortgage is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.
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