Buying a home seems like only a dream for many people. There’s the large down payment that’s needed, the high-interest rates for less-than-stellar credit, and the need to actually be approved for a mortgage. However, a Federal Housing Administration Loan in Portage MI is designed to help people purchase their first home and is an excellent option for those who aren’t sure if they’d be approved for a mortgage.
Higher Chance to be Approved
An FHA (Federal Housing Administration) loan is excellent for homeowners who are worried about being approved because they have a higher chance of being approved with one of these loans. They are insured by the federal government, meaning it’s not as risky for lenders to go ahead and approve the mortgage for someone who otherwise might not be able to purchase a home.
Those who have a lower credit score will want to take a look at an FHA loan as it’s more likely they’ll be approved despite their credit score. If it’s still too low for this type of loan, they can receive advice on how to raise their credit score to try again.
Lower Down Payment Required
The down payment required for a mortgage can range up to 20% or sometimes more if a person has poor credit. Potential homeowners must have this amount, plus closing costs, saved before they’ll be approved for the mortgage. If a potential homeowner doesn’t have the funds to pay the standard down payment, an FHA loan might be an excellent option as the required down payment is typically only 3.5%.
Lower Closing Costs
Closing costs can be incredibly expensive. With an FHA loan, however, potential homeowners have the opportunity to obtain lower closing costs on the home they want to purchase. This means they need less money up front and will still be able to obtain the mortgage and cover the closing costs to get the home they want.
Just because you don’t have a significant amount saved for a down payment or an excellent credit score doesn’t mean you can’t apply for a mortgage and realize your dream of being a homeowner. If you’d like to learn more about options for potential homeowners like yourself, take a look at how you can get a Federal Housing Administration Loan in Portage MI. Find more information to get started today.