Does a mortgage seem too financially out of reach for you? It doesn’t have to be!
No need to crash with Craigslist roomies for the rest of your life (*cringes*). If that 20-percent down payment just does not seem doable, no matter how much you penny pinch or squeeze out savings, a FHA mortgage might be the money move you need to make, STAT.
A FHA mortgage is insured by the Federal Housing Administration and offers more flexible lending standards and lower minimum down payments—real lower minimum down payments, as in 3.5 percent compared to the standard 10 percent or 20 percent. FHA loans also make mortgages more accessible for people with less-than-perfect credit.
Sounds like a steal, right? There are a few strings attached. FHA loans come with mortgage insurance premiums, and since you’re saving on your down payment, you can also expect to pay more in interest over the life of the loan. *Sigh.*
Don’t forget that you’ll also be slapped with closing costs. But, another perk to FHA mortgages is that your lender might cover some of those fees. If you’re one of the lucky ones, get ready to bust out your monogrammed thank you note stationery.
Here’s the thing: You can’t expect to be approved for a FHA mortgage just because you’ve binged a sufficient amount of HGTV and feel like you’re ready to become a homeowner. You’ll have to meet certain requirements, like:
- Steady employment history.
- The ability to pay a 3.5-percent down payment.
- The ability to make your monthly payments.
- A minimum credit score of 580 to qualify for the 3.5-percent down payment.
- U.S. resident status.
Interested? Thought so. Check out this calculator below to determine whether a FHA mortgage is right for you! And then follow me on FB!