The mortgage industry has been getting a few setbacks for the past few weeks. Mortgage rates has been getting higher and higher, with many rate discrepancies between lenders. This makes it hard for people to start planning their future, especially for those with a history of bad credit.
How FHA Loans differ
The Federal Housing Administration (FHA), offers one of the best mortgage rates and financial loans in the market today. This organization has aimed to cater to all the needs of potential buyers, by giving more lenient rules, as opposed to more traditional lending groups. The FHA will allow loans to be handed out to those with poor credit history, or those who have none at all.
Traditional financing looks into a person’s credit scoring, which looks into your credit background. Once you are deemed to be below their required credit score, you are automatically disqualified. But with FHA loans, none of this matters. They will only require you to write a reasonable explanation for the circumstances that led to your poor credit history. For cases of past bankruptcy, special cases are considered after their perusal.
Today, the lowest APR you can get for a 30-year fixed mortgage is around 3.250%. Many lending groups, such as Amerisave and Quicken Loans have and APR of 3.891% and 4.174% respectively. These are still relatively high interest rates.
The FHA only offers 3.75% APR. And because this is the interest rate for a fixed-price mortgage loan, you can be assured of some stability, no matter how unstable the real estate market becomes. For those who are seeking more liquidity, the AMR offers even lower interest rates. With this, you are only expected to give interest pays. This can significantly lower your monthly bills.
Once you get approved for a loan, you are expected to pay about 10% initial deposit of the sum amount. You must also ensure that the monthly cost of your housing will not go beyond 41% of your monthly income. This is a really great offer from the FHA since many other banks provide to be stricter with regards to these rules.
Established in 1934, the FHA has been aiming to provide affordable housing loans to those who are underqualified from many conventional lending groups. Now, many people are realizing their dreams of purchasing their own houses. The FHA is the perfect solution in cases when a particular home buyer is unable to continue with the loan. In such cases, the FHA frees the lender from paying the insurance fund. So if you’re just starting out and thinking about buying your first house, you’ll never have to think twice again. Choose IHL Direct FHA Loans.