Are you looking to buy your first home? This is an exciting time in your lives, and it is easy to get entirely caught up in the fun and excitement. Even if this is not your first home, you may need to finance your purchase, and an FHA home loan is one of the options Helena Mt residents should consider. Here are some reasons to think about this kind of mortgage.
FHA – What is it?
The FHA is the Federal Housing Administration, and it is part of the federal government. During the Great Depression period, many people defaulted on their mortgages, and this created an epidemic of housing foreclosures. The FHA came from the National Housing Act which increased housing construction, provided jobs, and made financing more attractive to lenders because the government backed the loans.
When you receive an FHA home loan in Helena Mt is not issued by the government. However, the government guarantees your payments, so the lender does not take a huge risk. If you default your mortgage lender still gets paid for the loan.
Why Take Out an FHA home loan in Helena Mt?
One of the most attractive features of this government backed mortgage is the down payment. For example, a typical conventional loan may require as much as 20 percent or more down. On a $200,000 house, this comes to $40,000 and most people buying homes today do not have this much available. This is especially true for first time buyers.
If your credit score is at least 580, you can get a mortgage with as little as 3.5 percent down. Lower credit scores may still qualify, but they might need a ten percent down payment. You must live in the house, and your lender can give you all the important qualifications about this kind of financing.