One of the most popular options for buyers seeking to purchase real estate is an FHA, or Federal Housing Administration, loan. Requiring a small down payment, these are a wonderful consideration when thinking of buying real estate on the Gulf Coast.
So, what exactly is an FHA loan? This type of loan is insured by the FHA, which provides another level of security and guarantee to your lender. Basically, should you fail to be able to make the required payments to them, the FHA will step in and pay the lender instead.
For buyers, there are quite a few attractive features of these loans, as well. First, they require you to make a smaller down payment than most traditional loans, as small as 3.5%. It’s also easier to use gifts, say money given to you buy family, toward that down payment of closing costs than with other loan types. Also, if you have recently come out of a bankruptcy situation, an FHA loan may be easier for you to acquire.
Speaking of acquiring such a loan, there are a few minimums to be met. These include basic income limits, of which there are none as long as you can show you have the means to repay the loan. Debt to income ratio requirements are applicable, as is a credit score rating of a certain amount. Think this may be a solution to buying your next home? Speak to a lender to qualify and then begin the hunt with Southern Real Estate Sales!
