The home financing professionals at MortgageDepot understand better than anyone how frustrating and confusing the process of obtaining a mortgage loan can be. Minimum down payment and other eligibility requirements can make it difficult for families to purchase the home of their dreams, but we might have a solution.
The FHA mortgage program
As mortgage professionals, we have access to a number of different mortgage programs, including FHA mortgages. An FHA mortgage is a loan backed by the Federal Housing Administration which is part of the federal government.
Lenders authorized to lend money under the guidelines established for the FHA program do so with the assurance that the debt will be paid even if the borrower defaults. This allows lenders to offer more relaxed and lenient underwriting guidelines. And this is also the fact that all FHA loans must carry PMI (private mortgage insurance).
Relaxed eligibility guidelines benefit buyers
Individuals who do not have the 20 percent down payment required by most conventional mortgage lenders can qualify for an FHA loan by putting down as little as 3.5 percent. In addition to the lower down payment requirements, our mortgage loan officers recommend FHA financing to borrowers because it offers the following benefits:
- Gifted funds: Borrowers may receive gifts from third parties to cover closing costs, prepaid expenses, and the entire down payment.
- Co-signers: Buyers who might have difficulty qualifying for financing are allowed to use a co-signor.
- Seller concessions: Sellers are permitted to contribute toward appraisal fees, credit report fees, title expenses and other closing costs incurred by the buyer.
- Lack of restrictions on buyers: FHA loans are not limited to first-time buyers as are some other government-insured mortgages.
- Relaxed underwriting standards: Bankruptcy discharges that are more than two years old or poor credit histories do not automatically disqualify a borrower.
Among the advantages of FHA loans that our trusted team of knowledgeable mortgage loan consultants believe makes them ideal for some borrowers is their availability for refinancing in addition to new purchases.
Our mortgage professionals can find an FHA loan to suit your needs
The flexible credit requirements, low down payments and relaxed underwriting guidelines are not the only reasons that we offer FHA financing to homebuyers. FHA offers other loan products, including one specifically tailored for individuals purchasing homes requiring renovation and rehabilitation.