For many people living in Sacramento, CA one of the hopes in life is to eventually become a homeowner, with a property to call your own, living in your own house, under your own rules, just like your parents before you. It’s part of the Great American Dream.
However, for a lot of people living in Sacramento, CA, that dream may not as easy to achieve as it was for past generations like the “Baby Boomers” who are now facing retirement. But that doesn’t mean that buying homes is out of reach for today’s non-Boomer Americans. An FHA loan is one way to make the dream come true.
What Is An FHA Loan?
FHA stands for Federal Housing Administration, and, as the name implies, this is a government organization. So when you take out an FHA loan for your mortgage, rather than with one that is strictly the financial product of a bank, you’re getting your mortgage issued to you from the US government itself.
However, this doesn’t mean that this is a government handout. A loan is still a loan, and in this case, you’re still going to be expected to pay it back. The usual classes of FHA loans run from 15-30 years to pay back the amount.
How Does An FHA Loan Work?
40% of Americans have bought their homes through an FHA loan. This is not a mortgage that is designed only to appeal to the affluent top 10% of American society. FHA loans are aimed explicitly at first-time home buyers, and/or those with moderate incomes.
One of the best things about qualifying for this loan is that, because this is a loan issued by the FHA, it has Federal insurance protecting it, and you. This means that there’s a certain amount of confidence from others when they find out that you have an FHA loan. There are a variety of different loan types available, including fixed rate, fully amortizing loans, to adjustable rate mortgages.
Who Qualifies For These Loans?
A typical mortgage often requires a credit score of 620, and the funds to cover a down payment of 20% of the home’s cost have with some clear, definable financial history. FHA loans are designed to help people with less conventional financial records. For example, if you:
• Have good credit, but can’t cover a 20% down payment
• Have a lower credit score, or don’t yet have a credit score/history
• Have experienced a foreclosure
• Had a good credit rating until an accident, death in the family or other major incident occurred
Then you are probably one of the prime candidates for getting approved for an FHA loan. The issuers of these loans understand that not everyone can have a pitch-perfect credit history, but everyone that works hard deserves to have a home. The FHA loan is here to help with that.
If you live in Sacramento, CA, and you’re thinking of buying a home, but aren’t sure that can get a mortgage, then maybe AP Mortgage can help you. Contact us and let us know what you’re thinking, and you might find that an FHA Loan is the right solution for your home buying needs.