FHA loans are mortgages insured by the Federal Housing Administration (FHA), which can be issued by any FHA-approved lender in the United States. Unlike conventional loans, FHA loans are government-backed, which protects lenders against defaults. This in turn allows lenders to offer prospective borrowers more competitive rates.
The biggest obstacle to most new homebuyers is the feared down payment. But did you know that FHA loans allow down payments as small as 3.5%?
On a $250,000 home, a 3.5% down payment translates to $8,750 – quite a contrast to a traditional 20% down payment of $50,000.
To qualify for a 3.5% down payment with a FHA loan, your credit score needs to be at least 580. If your score is lower than this, you will need to put at least 10% down.
Contact RLG today to see if you qualify!