There’s no limit to the amount of times you can get an FHA loan. This is a wonderful thing, especially if you know all the benefits of using this program to get a home. The following are some benefits you can enjoy more than once in your lifetime.
1 Simpler Credit Qualifications
One big perk of getting an FHA loan is that you don't have to worry so much about credit. It's wild that this country requires you to have good credit to do anything since that means you're expected to be in debt at some point in your life, but that's how it is. While conventional lenders require a high credit score, FHA lenders are okay with less than perfect scores. You won't be penalized if you don't use credit much or you've missed a few payments here and there. You should also know that if you've had issues with your credit like bankruptcy or foreclosure, this is your best route, too.
Conventional lenders wait at least four years after a bankruptcy to lend you anything, while FHA waits only two years. If it's a foreclosure, then most lenders will wait seven years, unlike the FHA program that waits for three. You can see that this type of loan works with you, especially if you've gone through some financial turmoil in the past.
2 More Options Down the Line
Getting an FHA loan means you'll have more options. Conventional loans are pretty fixed, but an FHA loan was created to help folks out when they need the help. For example, you don't have to put down a large down payment to get your property. Most conventional lenders expect a 20 percent down payment, while FHA allows you to choose a large down payment or one as low as 3.5 percent. It doesn't stop with just the down payment either. Down the line, when you're ready to refinance, you can do so easily because this program already has that route all laid out for you.
It's called the FHA streamline program. This program allows you to refinance your loan and potentially get a lower interest rate and monthly payment. You may want to read up on FHA streamline program pros and cons to understand it better, but this is a good thing.
3 Leniency on Help
With this loan, you can accept help with a lot more leniency. This may not seem like such a big deal, but it is. For example, conventional lenders will only allow family members to help you with your down payment. FHA loans allow you to get your cash from a friend or maybe your boss. It doesn't matter as long as they want to help you. It doesn't stop there. You could also work with a co borrower if that helps you get approved or gets you a better interest rate. This person can be a close friend as long as you can present documentation that shows the relationship you two have is family like.
Conventional lenders only allow you to have a co-borrower if they are family members, and they are much stricter about this type of situation. It seems they are a little too cautious when all you want to do is receive the help you need wherever it's coming from. If you are thinking of making any of these sorts of arrangements, you can see that the FHA loan is simply the best route to take.
Now, you know the perks of choosing an FHA program for your home, for this one and the next, but if you want to know more, it's best to talk to an FHA loan expert so that you can get all your questions answered.