The average homeowner has several viable financing options when it comes to financing their first home. One of the most advantageous is the FHA home loan. The FHA mortgage loan came into being with the objective of increasing ownership by providing homeowners with a cheaper and more convenient alternative to most traditional mortgage loans and by simplifying the purchasing process.
Here are some compelling reasons First Time Buyers choose the FHA mortgage loan:
- As an alternative to subprime loans – FHA mortgage loans can be used as an alternative to sub prime loans. Unlike most other loans, FHA loans have a very low interest rate. Moreover the homeowner can avail of a fixed rate of interest and be exempted from paying any repayment fees.
- Low down payment - Another major advantage of the FHA loan is the low down payment. The usual rate of down payment does not exceed 3.5 % for purchasing home, which works out to be a very cost effective option. The loan is also very flexible in the sense that it can be repaid in the form of a gift.
- No hidden charges – FHA mortgages are very transparent and lucrative choice for homeowners. Unlike subprime home loans which led to numerous foreclosures over the years, the FHA loan does not have any hidden charges, excess fees or sudden spikes in down payment.
- No cash reserve requirement – At the time of closing, most traditional mortgage loans require the applicant to show that they have adequate cash reserves on hand. This usually is a deterrent for most middle class homeowners, as they are required to show thousands of dollars in addition to the money that is required for closing costs and making down payments. However the FHA loan has no such requirement.
- More borrowing potential – The FHA loan is very liberal as it provides the applicant with a greater borrowing potential. Using this benefit to your advantage, you can spend up to half your income on all your monthly obligations.
- Readily available – The FHA loan is an extremely popular financing solution and is readily available nationwide. A growing number of mortgage lenders are providing this facility.
Learn more about the FHA loan benefits here.
Coast 2 Coast Lending is proud to serve home buyers in Fla, GA, VA and Tennessee. Call us anytime at ph: 904-810-2293 to discuss all the first time buyer loan options today.