What you need to know about getting an FHA loan and qualifying for a low down payment

What you need to know about getting an FHA loan and qualifying for a low down payment

The Federal Housing Administration (FHA) offers low down payments and low interest for people who may not qualify for a traditional mortgage. You want to know about getting an FHA loan because, frankly, the interest rates are decent and the low down payments can’t be beat. What kind of credit score do you need and what’s the catch? 

Firstly, the rumors you may have heard about your credit score needing to be in the high 500s to qualify you are true, depending on what type of debt you have. A mortgage broker or an FHA specialist may be able to help you go over your credit report. They can tell you whether you may qualify and what you will need to do in order to improve anything that may be keeping you from getting an FHA loan right away.

Next, if you’re making a 3.5% down payment as opposed to a 20% down payment, how does the lender cover the cost? A smaller down payment will increase your interest rate as well as require that you carry Private Mortgage Insurance (PMI). You’ll either pay now or you’ll pay later. Read Part 1 and Part 2 of “Understand Your Mortgage Structure” to get a general idea of how repayment on a traditional loan will work.

4 Simple Tips for Cheaper Home Insurance

Almost all of us hate paying for home insurance. However, it is a necessary evil for majority of us. Here are few tips that will help you reduce the amount of money you pay towards home insurance:

Shop around: – Do not just choose the first insurance company that you approach. You have to make sure that you do a lot of research on several insurance providers to find out the one that provides the best value for your money

Buy online: – After you select a provider, buy online rather than directly from their company offices. Most companies will offer discounts of up to 20% for individuals buying home insurance online.

Combine the contents and building policies: – When you buy these policies from a single provider and combine them in a blanket policy, you will be given a discount and also you may end up enjoying lower premiums than if you had bought them separately.

Pay upfront: – If you have the financial muscle to pay yearly premiums in advance rather than monthly premiums, do it. In the long run, you will end up paying less.

There are many others ways to reduce the cost of your home insurance. You should always be on the lookout for ways that can help you reduce your insurance costs.