Choosing A Better Budgeting ProgramChoosing A Better Budgeting Program

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Choosing A Better Budgeting Program

About a year ago, I could tell that things weren't going my way when it came to my money. I was having a hard time paying my bills, and it was really stressful. I knew that I needed to make things right, so I started looking into different budgeting programs to see what could help. I was able to find a plan that also had a smartphone application so that I could take care of my bills no matter where I was. The difference that it made in my life was amazing. Before I knew it, I was able to climb out of debt and save a little money. This blog is here to teach you to do the same thing.

First Time Buyer? Learn About An FHA Loan

9 August 2022
 Categories: Finance & Money, Blog

It can be an exciting time for those about to buy their first home. The home search process can be at times exhilarating and frustrating. One part of the buying process, though, deserves a lot of thought and planning to carry out. Read on for first-timer tips on getting a loan and how an FHA  loan could help ease those financial jitters.

What is a First-time Buyer?

You might think that it would be obvious, but it depends on the program you are considering. Several different entities offer special programs for first-time buyers and the one from the Federal Housing Administration (FHA) is a very popular choice for many.

For the FHA first-time loan program, the applicant may not have owned a home in the past three years. If you are a single parent or a displaced homemaker who previously owned a home with someone, you may still qualify for first-timer status.

What is Meant by the Loan Guarantee?

Government-sponsored programs like that of the FHA provide buyers with several benefits. The biggest benefit might be the loan guarantee. The FHA guarantees that the lender won't be left with an unpaid mortgage if the buyer steps away from the home.

Many people are under the impression that the loan guarantee means that every buyer that applies is guaranteed to be approved. While that is not the case, the FHA certainly does its part to get everyone they can into a home using their guarantee to lenders. Only certain lenders deal in FHA loans, however. As with all things governmental, there is more paperwork and requirements to fulfill than with a conventional mortgage.

What Do FHA Loans Offer Applicants

These loans are great for first-timers for several reasons besides the loan guarantee, which is a wonderful method of gently pushing lending institutions to approve the loan. Some benefits include:

  • Very low down payment options. While conventional lenders often expect a large down payment, FHA loans can be had for just 3.5% down. On the flip side, FHA loans with that low of an interest rate may require the buyer to have mortgage insurance, which is an added expense.
  • FHA loans tend to have lower DTI (debt-to-income) ratios.
  • Those with a previous bankruptcy or foreclosure are welcome to apply if enough time has elapsed.

To learn more about this fantastic way to get your first home, speak to a home loans service today.