The Federal government of America is providing Home Loans to their citizens to buy new houses. The government is trying its best to provide home loans to all the people including rural areas, veteran people, low-income people, etc. There are several loan programs offered by the government. One of the most important from them is FHA First Time Home Buyer Programs.
What is FHA First Time Home Buyer program?
FHA is a government agency which insures home loans given by banks and private lenders. The primary goal of FHA is to improve housing standards and to provide home financing through mortgage loans.
This program ensures lender about the mortgage and in the case of suffering from loss. With the FHA guarantee, many banks are providing house loans with larger amounts with the fewer requirements.
Benefits of FHA first time home buyer programs:
1. Low Down Payment:
FHA Home Mortgage Loans requires low down payment as compared to conventional loans. It ranges as low as 3.5% of the purchase price. What the source of down payment money can bring from anyone is not a problem to FHA. Mostly it comes from personal savings. This program is the best opportunity to people who are planning to have Home Loans.
2. Seller Can Help in Closing Costs:
The closing price for a new home is very low as the seller will contribute only 3% in the FHA Home Loan Program. This program provides an opportunity to purchase the new house with only down payment and can ask the seller to pay 3% as closing costs. This cost includes property taxes and home insurance with interest.
3. Interest Rates are Very Low:
In the case of Interest rates, FHA Loans are lower than many other loans. To avail FHA Home Loan you need at least 620 credit score. Interest rates will not tie with credit score. For example: if your credit score is 620 and another person score is 750, the interest rates for both of you is same. This type will not be possible in the conventional loan as the person with high credit score will get the low-interest rate.
4. There are no Limits on Amount of the Mortgage:
The FHA loans are not limited to a certain amount, but there exist limits on property value. This limit includes checking with the realtor or lender that the property value differs from one place to another in the country.
5. FHA Streamline Mortgage Refinance Loan:
The best opportunity in FHA loans is if you already have a mortgage loan, you can refinance using FHA Streamline Mortgage Refinance Loan. This loan is possible only when you have a mortgage loan, and you need to refinance it to a new FHA loan.
FHA first time home buyer programs are more safe and secure as Federal government organizes it. This program is an excellent opportunity to buy a new house with low down payment and low-interest rates. Refinance is an added advantage of this loans. You can check more information from the official website of FHA.