For first time home buyers and repeat home buyers, it can never hurt to look into financing a home purchase using a FHA loan. The Federal Housing Administration insures loans given by private lenders. This insurance allows the first time home loans to become available to those with low credit or no credit, where other lenders may not be willing to take a chance on such borrowers, as the insurance allows lenders to rest assured that they will not suffer a loss should the borrower default on the loan. However, these home loans are not strictly for those with poor credit scores or credit blemishes, however, as they also come with a plethora of other assorted benefits.
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FHA is well-known for insuring first time home loans with notably low down payment rates, and or house buyers this means that less of a down payment will need to be paid up front to close on the home they wish to buy. Often, home loans will have down payment rates of as much as 20% of the total cost of the loan, which can wind up costing a home buyer a significant amount of money, but a FHA home loan will often only require a down payment of around 3.5%. This low down payment does not come at the expense of low interest rates either, as even with such a low down payment rate, interest rates will remain reasonable and competitive.
FHA house loans do have limits, however, and it is best that prospective home buyers research what the current loan limits are in the area they are looking to buy a home in. These rates will change from year to year, and for first time home buyers looking to purchase a home in 2014, it is recommended that they investigate what 2014’s rates may be in their desired area. Lower income areas may see reduced loan limits of around, while the higher income regions could see limits as high as $650,000 for the year 2014. These limits are created using the median housing prices of counties across, allowing home buyers to be able to buy an average house within their chosen county using FHA financing.
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