FHA is another credit company that can make your dream of owning a home in America come true, but wait a moment! There are certain issues that are taken into consideration by the company before approving your loan and you should be aware of these factors. This company has helped many first time home owners to access loans but due to certain policy changes, this trend is changing. The would-be home owners are likely to go through some form of screening with regard to their credit score rating.
Expected credit score for FHA loan application
The FHA loan applicants are expected to have a FICO score of 580 so that they can qualify for the down payment facility which is pegged at 3.5%. The main advantage of a good credit score is that your down payment will be low and this means that you will not pay large sums of money as guarantee of your loan procurement. However, those prospective FHA loan applicants can still qualify even if their FICO credit score is below the recommended 580. These people with low scores can compensate by paying high down payment yahoo finance rates of 10 %. Therefore, it is up to the applicants to ensure that they have good credit score rates so that they can pay low down payments to secure loans for their homes. This gives them an added advantage though they can still qualify to get the loans as long as they are prepared to pay high rates of down payment.
Benefits of FHA loans
There are quite a number of benefits that can be derived from applying for an FHA loan and these are not common with other types of conventional loans. The benefits include the following:
Major purpose of FHA credit loans
Above all, it can be observed that FHA loans are specifically designed to assist the would-be home buyers to realize their dreams of owning a home someday. This means that this type of government insured loan comes with some favorable conditions attached such as leniency which are not readily found from other conventional budgeted lenders. The government has a pivotal role to play in making the loans accessible to different applicants regardless of their previous credit score ratings. However, like any other credit facility, a good credit score is essential since it can guarantee you success in your FHA loan application.
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