How Not to Apply for an FHA Home Loan

FHA home loan guarantees can allow you to secure a low, fixed interest rate. These loan options also provide key advantages such as lower down payment requirements and lower prepayment penalties. While there are many positive sides to FHA options, they do require more from you in the application process. Avoid common mistakes like:

Ignoring your credit score - You do need to meet minimum credit requirements for these loans, contrary to popular opinion. These are not need-based loans; they are credit-based loans. You may qualify with a low income or low down payment, but you should still have a solid history of making debt payments.

Not looking for a private loan first - The FHA does not give direct loans, it only guarantees private loans. This means you will have to have a lender willing to fund your loan in order to qualify. It is advantageous to have the private loan first.

Not asking questions - Reading about programs and filling out online applications is smart, but you should still leave time to speak with a representative about questions. You do not want to miss out on unique options just because you did not take the time to ask if they are available.

 

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