While purchasing or refinancing a home can feel like a challenge, there are some options that can help you make the most of one of life’s biggest investments. A Federal Housing Administration (FHA) loan, which is insured by the U.S. government, makes it easier for people to purchase or refinance their homes. Not only do FHA loans offer a lower down payment and low equity refinances, this program also makes it easier for people with less-than-perfect credit to get approved. Let’s take a look at the specific advantages of an FHA loan so you can decide if it’s the right decision for you.
A low credit score could get between you and your new home, but FHA loans allow people with credit scores as low as 580 to receive financing. With these lower credit requirements, it’s much easier to purchase or refinance.
FHA loans only require a 3.5% down payment, and they’re offered as both fixed and adjustable rate mortgages (ARMs). Fixed-rate FHA loans are available in 15-, 20-, 25- and 30-year terms, so there is a wide range of options for you to choose from. FHA loans are also available as a 5-year ARM, which will allow you to take advantage of lower interest rates.
If you previously purchased a home with a hefty interest rate, refinancing could help you. With FHA loans, you can refinance up to 97.75% of your home’s value, potentially giving you a more manageable monthly payment.
FHA Streamline Refinance
If you used an FHA loan to purchase your home, you might have the opportunity to take advantage of the FHA Streamline Refinance. Even if you owe more than your home is worth, you could potentially refinance to a lower interest rate and a lower monthly payment. The FHA Streamline Refinance program also allows homeowners a simplified application process, including lower credit requirements, no appraisal and less documentation. In other words, you’ll be able to refinance your loan faster than ever before.
If you’d like to learn more about the many benefits of FHA loans, call 800-QUICKEN or leave your questions in the comment section below.
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