Learn About FHA Loans

Ready to make your dream of homeownership a reality? Explore FHA loan options with Shannon Christenot and take advantage of low down payments and flexible credit requirements designed to fit your needs. Don’t let financial worries hold you back! Let’s find the perfect FHA loan for you today.

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Purchasing A Home With An FHA Loan

Although the idea of becoming a homeowner is very exciting, the process is often associated with certain challenges that can cause stress for a potential homeowner. Many people who are interested in buying a property are concerned with being able to afford a down payment and closing costs and meeting mortgage eligibility requirements. An FHA loan can be a great mortgage option for homebuyers because it has low down payment options and more lenient borrower qualification requirements. If you are interested in becoming a homeowner with an FHA loan in Los Angeles, California, Shannon Christenot is here to help. Continue reading to learn more about purchasing a home with an FHA loan.

What Are FHA Loans?

An FHA loan is a non-conventional loan option, which means that it is backed by the federal government. They were initially created during the Great Depression in order to help families with a lower income qualify for financing in an attempt to increase the economy after the economic downturn. Even though certain eligibility requirements have changed since that time, FHA loans are still available and are an excellent pathway for people with lower credit still have the option for home ownership. Because FHA loans are insured by the Federal Housing Commission, private lenders are financially covered if a borrower is unable to pay back the loan. Therefore, lenders are able to offer less expensive down payment options and more moderate credit score requirements. If you are interested in qualifying for a 3.5% down payment, a FICO credit score of 580 or higher will be required, and if your credit score is over 640, you will be eligible for more favorable loan terms.

The Benefits Of An FHA Loan

FHA loans offer several advantages for a borrower, especially for first time homebuyers. In order to secure an FHA loan, the credit requirements are not as strict as a traditional loan, which makes it much easier for a borrower with lower credit to purchase a home, and a borrower can make a down payment as low as a 3.5%. The down payment amount can also be gifted to the borrower from a family member or friend in the event that they’re unable to afford it themselves. FHA loan rates are generally at least 1% lower than most conventional loans, and even if you have a higher debt-to-income ratio, (DTI), which usually inhibits the ability to purchase a home in LA county with a conventional loan, you still may be able to qualify for an FHA loan. FHA loans can be used to make renovations, a cash out refinance to reduce interest rates and terms, and can be used with a reverse mortgage in addition to purchasing a property.

If you are interested in buying a home in Los Angeles, California with an FHA loan, contact Shannon Christenot today for a consultation.