FHA Loans are a great way to get a mortgage in Chicago if you don’t have enough money saved for a traditional 20% down payment. There is a lot that people don’t know about FHA, so let’s go over some of the basics.
1. That Lower Down Payment
FHA loans require less than a 20% down payment like a conventional loan. You can get a mortgage with FHA for 3.5%, although you’ll also have to pay Private Mortgage Insurance or PMI. Although, PMI has lowered from 1.35% down to .85%, making it a great time to get an FHA Loan.
2. FHA Loans Aren’t As Difficult To Qualify For
The government is guaranteeing your FHA home loan. That gives first-time homebuyers a chance, as well as residents of disadvantaged neighborhoods, who can find obtaining a mortgage a real challenge. It makes lenders more likely to give you a loan, knowing that they won’t be out entirely in a failure.
3. Lower Interest Rates With FHA
Since the FHA doesn’t actually provide the financing or determine the interest rates of the loans it backs, the rate you pay for an FHA home loan will be negotiated with an FHA-approved lender. This lets you get a lower rate generally, although that is before PMI is included.
4. FHA loans can help you avoid foreclosure
The Making Home Affordable Program (MHA) helps homeowners that have had setbacks financially to stay in their homes. MHA can help reduce loan payments and avoid foreclosure if you’re in default on a mortgage.
5. Disaster Victims Find Relief With FHA
Floods, landslides, earthquakes, tornados and other natural disasters destroy people’s lives on a daily basis. Luckily, the FHA Mortgage for Disaster Victims Program will provide 100% financing for those whose homes have been destroyed in a disaster.
6. FHA Loans Help You Fix Up Your Fixer-Upper
The Energy Efficient Mortgage (EEM) program can help you lower your utility bills by financing the cost of adding energy efficient improvements to your home.
Other home improvements can be financed through an FHA insured loan, as well. If you buy a home that needs a lot of work, you can get up to $25,000 on top of the purchase price for alterations, repairs and site improvement in one loan. An FHA-approved lender, such as The Home Loan Expert, Ryan Kelley that is approved to make “Title I” loans will help you.
These are a variety of ways that FHA can help you that you may not have known about. Nobody makes it easier to get an FHA Loan than The Home Loan Expert, Ryan Kelley.