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3 Things No One Ever Tells You About FHA Loan

Buying a home, especially as a first time home buyer, can be stressful. From coming up with a 20 percent down payment on the house to choosing the best mortgage lenders for the best rates, the home-buying process itself can be frustrating. However, little do you know an FHA loan can make the process less frustrating and less stressful. For example, buying a home with an FHA loan does not require the traditional 20 percent down.

Related: Get Pre-Approved for a Mortgage through LendingTree.

1. The down payment is super low

The down payment using an FHA loan for buying a home is 3.5 percent. This is super low comparing to the conventional 20% down payment. While there are several advantages of putting 20 percent down on the house, it’s not always necessary.

For example, when you put more money on the house, you save more on interest payment and you will pay your mortgage earlier. However, not everyone can come up with 20% down payment on a house.

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2. Your credit score does not need to be perfect

Usually, you would need an excellent credit score to get qualified for a loan to finance your first home. However, with an FHA loan, your credit score needs to be at least 580. Before you apply for an FHA loan, make sure your credit score is at least 580.

We recommend using Credit Sesame . It’s completely free and it monitors your credit score and gets you updates on your credit score.

It’s important to have at least 580 credit score in order to qualify for an FHA loan. If you have less than that, work on improving your credit score.

Check Today’s Low FHA Mortgage Rates

3. Pre-approval for a loan is very easy

Getting pre-approved for buying a home with an FHA loan is quite easy. First, you will need to work with mortgage lenders who offer FHA loans.

Second, you want to make sure you have a copy of the following for the lenders: 1. your tax return. 2. Your 2 most recent pay stubs 3. A bank statement showing the funds for the 3.5% down payment.

Third, make sure your credit score is at least 580. This needs to be repeated and emphasized. If it’s less than that, you might still be qualified but you will need to come up with a larger down payment, like a 10 percent down.

Once you’re approved for the FHA loan, your pre-approval letter will show how much you’re qualified for so you can start

In conclusion, buying a home for the first time can be frustrating. But it does not have to be. With an FHA loan, you can buy your dream home.

These are some of the things you need to know about FHA loans before buying a home. 

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free.

Up Next: 5 Signs You’re Not Ready to Buy a House.

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