For some, the idea of owning a home is a foreign concept. With the 300,000,000 people that live in the United States, only a certain percentage of these people actually own the homes they live in. Just like going to college, some families have never had a member that has owned a home. There are now federal program that will help people own their home if that is a goal. Using an fha loan in Tucson is one such government sponsored program.
An FHA loan is a loan that is granted through the Federal Housing Administration to people that could not normally qualify for the strict standards and requirements that a commercial or private lending institution would require. The funny thing is however, is that all loans are sold back to the government under the Freddy Mac or Fannie May program using the same standards. In the case of FHA though they have lower requirements for getting the loan in the first place.
Typically, a standard loan means that you have to come with a standard 20% down of the asking price of the home. So you if were interested in a $100,000 home, which is well below the country’s median price range for a home, you would have to come up with $10,000. This does not include the standard closing fees, property inspections, or costs associated to procure your loan in the first place. A first time home-buyer in this situation would need approximately $15,000 to $18,000 up front to get into their home.
This is why a lot of people do not believe that they can own their home. Trying to save up this amount of money is not typical. The FHA loan however, does not require a potential home-buyer to come up with a down payment. At the very most they are required to come up with 3.5% of the down payment so again in our scenario, that would only be a minimum number of $3,500 and most closing costs are waived.
Of course there are downfalls to an fha loan in Tucson but considering the home ownership part, most people don’t see these as too much of a negative proposition. Ask your financial advisor about the different types of loans that are available and if a government funded loan may be best for your situation.