If you think you need a 20% down payment to purchase a home think again. According to a recent survey nearly 2/3 of all home buyers put down 5% or less and with the interest rates at an historic low there has never been a better time to buy. If you’re thinking about buying your first home in the Austin or Bastrop, TX area, contact me today, I would love to earn your business. There are many options available for those who need assistance with down payments, including a FHA loan.
An FHA loans is a US Federal Housing Administration backed mortgage which is lent to you by a FHA-approved lender. Federal Housing Administration loans are offered in conjunction with the U.S. Government. These loans are designed to assist home buyers overcome many of the obstacles to buying homes of their own. FHA loans are a loan that affords buyers the following benefits:
- Low down payments
- Closing costs can be covered by grants or even gifts
- No cash reserves needed
- Co-borrowers that are non-occupying are permitted
- Depending on the program, loans may be fully assumable
FHA loans are recommended for first time home buyers, people lacking a down payment, those who plan to use gifts or grant money, individuals lacking credit history, and those who are concerned about qualifying income. These loans are also limited to single family homes, townhomes, condos, and manufactured homes on permanent foundations. While there are underwriting requirements on these types of loans, the FHA can allow home buyers to get down payments as low as 3.5 percent. The underwriting requirements tend to be less stringent than conventional loans. While these loans may be a good option for those who cannot come up with the minimum 5 percent down payment of traditional loans, most people would benefit from exploring all of the options available to them, including down payment assistance programs. Check out some starter tips for getting an Austin or Bastrop mortgage.