There are a number of home loan options available to today's buyers, ranging from conventional mortgages to VA loans, jumbo loans, and everything in between. One potential option that can help you buy your next home that you won't want to overlook, however, is a Federal Housing Administration (FHA) loan. These home loans are government-backed, relatively easy to qualify for, and a suitable choice for many home buyers.
By having a better understanding of some of the common myths behind FHA loans, you can be better informed as you determine which type of mortgage is best for your needs.
Myth #1: FHA Loans Can Only Be Used to Buy Single-Family Homes
One common misconception that people tend to have about FHA loans is that they have to be used to purchase a stand-alone, single-family home. In reality, FHA loans can be used to purchase condominiums, townhomes, and even manufactured homes. There is no requirement that the home needs to be a single-family dwelling. Buyers using an FHA loan do, however, need to be living in the house full-time (in other words, it cannot be used as an income/rental property).
Myth #2: You Can't Finance Home Improvements Through an FHA Loan
If you're thinking about buying a fixer-upper, you actually can finance some home improvement costs through a special kind of FHA loan known as a 203k. This makes FHA loan options a great choice, whether you're buying a turnkey home or one that needs a little TLC.
Myth #3: FHA Loans Are Only For First-Time Home Buyers
FHA loans are a popular choice for first-time buyers because they don't require a large down payment as many other mortgage types do. However, there is no limit on how many times you can take out an FHA loan; even if you have already used one in the past, you can still take out an FHA mortgage on your next home purchase as long as you meet the eligibility requirements.
Myth #4: All Mortgage Lenders Offer the Same FHA Terms
This is not true! Interest rates and other terms can vary greatly from one mortgage lender to the next, so you'll definitely want to shop around if you're thinking about applying for an FHA loan. Even securing a loan with a slightly lower interest rate could save you thousands of dollars (or more) over the repayment period on your mortgage, so it's worth it to explore your options.
For more information, reach out to professional mortgage lender services.Share