Is a Texas FHA Loan Right for Me?
Before you ask your Texas Mortgage Broker for a standard, conventional Texas home loan, consider asking about a Federal Housing Administration (FHA) loan instead. Let's go over the basics of a Texas FHA loan. Of course, your representative at Texas Mortgage and Refinance can answer any additional questions you may have, and if it is in your best interest to obtain a Texas FHA home loan.
First of all, what is a Texas FHA home loan? A Texas FHA home loan is still issued by a private Texas lender, but it's insured by the Federal Housing Administration (FHA), essentially providing the Texas lender with greater security and you with lower monthly payments.
Here are a couple of reasons the Texas FHA loan may be better for you than a conventional Texas home loan. First, it can be easier to qualify for a Texas FHA loan. Since the Texas mortgage will be insured by the FHA and the U.S. Department of Housing and Urban Development, Texas lenders are more likely to issue the loan. We can get you qualified even if you have poor or less than perfect credit. Even with past credit problems like a bankruptcy, a Texas FHA loan is easier to qualify for than a conventional Texas mortgage.
Texas FHA loans also require a lower down payment for a purchase when compared to a conventional Texas mortgage. A Texas FHA loan only asks for a 3% down payment, which is significantly lower than some Texas banks' requirements of 10-20%. In some cases, we can even structure the Texas FHA loan so that you will not need any down payment for a purchase or near as much equity for a Texas mortgage refinance.
The Texas FHA loan can costs less in the long term than a conventional loan. Since the Texas FHA loan can offer more competitive Texas interest rates for poor to decent credit worthy borrowers, you can save you a lot of money over the term of your loan.
FHA also offers foreclosure protection. Unlike many Texas lenders, the FHA doesn't want to see your Texas mortgage foreclosed. So, they have a number of programs designed to help Texas homeowners who are in trouble. This can be a great resource if you hit hard times.
You may be asking, how do I qualify for a Texas FHA loan? First, you must meet the basic FHA credit rating requirements. While these are lower than most Texas banks and Texas lenders that offer conventional Texas loans, you'll still be subject to a credit check, its just that it will not be nearly as scrutinized. Secondly, your Texas mortgage must not exceed the maximum amount available in your Texas County. On their web site at www.hud.gov, the U.S. Department of Housing and Urban Development maintains a list of maximum amounts sorted by county. Thirdly, the Texas home must be appraised and inspected.
All in all, a Texas FHA loan works out to a much better borrower's deal than a conventional Texas loan for a credit challenged borrower.
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