First Time Buyers and FHA Loans
A FHA loan is one of the easiest mortgage loans to qualify for. Due to the program’s low down payment requirement, FHA loans largely appeals a great deal to first time home buyers. A First Time Home Buyer is defined as anybody who hasn’t bought a house in the last 3 years. A first time home owner, on the other hand, is somebody who hasn’t owned a home before.
A FHA loan is great for people who may have low credit scores, which would normally stop them from getting a loan from a typical lender. Although FHA only requires a middle FICO score of 580 to qualify, most lenders require a higher middle FICO score as an overlay. A common benchmark that big commercial lenders use is 640 middle FICO, some even at 660. AMCAP Mortgage is one of the few Texas mortgage lenders that originates a loan with FICO scores as low as 580. Not only can they originate a loan with scores as low as 580, they can indeed close it in a timely manner. While other lenders take 45 – 60 days to close a file, the professionals at AMCAP Mortgage close a file in 30 days or less. This is extremely important, specially for first time home buyers as this is their first time to experience the home buying process. We want the whole transaction to be as pleasant and smooth as possible.
The Borrower is only required 3.5% down payment and the money can be in form of a gift from a family member. The source of down payment can be a gift not only from a family member but also from a charitable institution or State home buyers program, such as Down Payment Assistance Program, etc. This helps tremendously and eases the burden on the borrower if a borrower is struggling to come up with the necessary money for down payment.
With a fairly low credit score requirement, combined with a minimal down payment needed, a FHA loan is ideal for first time home buyers looking to get into a home, compared to other loan programs available in the market. A conventional loan counterpart will require at least 5% down payment from the same borrower, not to mention, a higher middle FICO score requirement in order to qualify.
Contact our FHA Home Loan Specialists for additional information or use the tools available in this website.