FHA mortgages provide financing for many Americans today. Since the mortgage crisis, we have seen a huge number of mortgage programs eliminated and conventional loans have drastically tightened up their lending guidelines. making it more difficult for families to obtain financing for a home.
Although, FHA loans now require a minimum credit score of 640 and the down payment has increased to 3.5% it is still much easier to get approved on an FHA Mortgage than a conventional loan program. More importantly, the interest rates are currently lower than conventional mortgages allowing more people to qualify and get approved. So how is FHA loans good for your kids?
Well a recent study shows that children of renters are 40% more likely to give birth as unmarried teenagers, and almost twice as likely to be idle at age twenty and rely on food stamps. In addition, thier high school graduation rate is 19% lower and they are half as likely to acquire any post-secondary education. They tend to make $1.00 less per hour than children of parents that own a home. What is truly amazing is homeownership had a more positive effect on lower income families than higher income homeowners.
FHA Mortgages have a variety of ways to help families purchase a home. They can get 100% gift from a family member, non-profit organization, or employer for their down payment and closing costs. They can use "Mattress Money" (money saved at home and not seasoned in a bank account) submitted with a monthly budget demonstrating that the client could have reasonably saved the needed funds.
Also, a client can close on a loan using income from a job he/she has not yet started as long as the offer letter states that the client will start no later than 60 days after closing and can provide an offer of employment letter. This is great for relocation buyers who are trying to purchase a new home prior to moving and starting their new job. So as you can see FHA Loans help clients purchase homes and that helps their children be more successful.