Buying a home can be a wonderful experience or it can be a dreadful one that can leave you in tears half way through the process. Home ownership is a dream of many, but that doesn’t mean that mortgage loans and rates are understood by everyone. Many home buyers including first time home buyers are not 100% sure of what they are doing, what the process is, or what is entailed in their home loan. In 2016 approximately 35% of all home buyers were first time home buyers, and 59% of those who bought a home wish they understood the terms and conditions of their mortgage better. Understand loans is important but understanding types of loans is important as well. When one searches for a mortgage company near me, search results could be crazy, but knowing what each type of loan offered means can make the process easier. Read below to see the benefits of a popular first time home buyers loan, the FHA loan.
Easier Approval Odds
When searching for a mortgage company near me, a mortgage loan and researching mortgage rates and getting approved may be one thing that crosses your mind. Wondering if you will get approved for your loan is the difference in getting your hopes up or not getting your hopes up. Getting an FHA loan means that the approval odds are far greater than other loans. This means more people are approved for a loan compared to traditional loans from a traditional mortgage company.
Less Down Payment
For families trying to save up to buy their first home, a down payment can seem like something that they will never achieve. Especially for families who are lower income, using majority of their income on rent and want the option to buy instead of rent. An FHA loan allows future homeowners to put less money down in order to secure a mortgage loan. This is the difference between home ownership and renting forever for some families.
Competitive Interest Rates
When performing a quick search for a mortgage company near me, you might be surprised to find that interest rate varies drastically depending on companies as well as your credit score. This means that most of the time those with lower scores end up paying the most in interest. With and FHA loan this is not the case. FHA loans all have the same interest rate no matter what your score is. Lower interest rates can save you tons of money when it comes to finance charges throughout the course of your loan.
The price of a home can be an overwhelming thought for many especially first time home buyers. In 2016 the average price of a home was around 180,000 which can leave many first time home buyers wondering if they would even qualify for a loan. When searching for a mortgage company near me some loan companies will promise incredible approval odds, but knowing which loans are better and why they can help you make better choices when it comes to mortgage loans.