Low Down Payments with FHA Mortgage Loans for Summerville SC Residents are available from Homefront Mortgages

Low down Payments with FHA Mortgage Loans

FHA loans are popular with mortgage borrowers because of lower down payment requirements and less stringent lending standards.

In Short, an FHA loan is a mortgage insured by the Federal Housing Administration, a government agency within the U.S. Department of Housing and Urban Development. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan.

Why do people get FHA loans?

Conventional Mortgage Loans require a down payment of 20%.  The fact that the FHA requires a down payment of just 3.5 percent of the purchase price of a home is "huge attraction," says Michelle Dention, Principal Broker, Homefront Mortgages.

Lenders can offer FHA loans at attractive interest rates and with less stringent and more flexible qualification requirements because of that insurance.

LESS THAN PERFECT CREDIT IS OK

Minimum credit scores for FHA loans depend on the type of loan the borrower needs. To get a mortgage with a down payment as low as 3.5 percent, the borrower needs a credit score of 580 or higher.

Those with credit scores between 500 and 579 must make down payments of at least 10 percent.

In late 2014, Fannie Mae and Freddie Mac reduced minimum down payments to 3 percent from 10 percent, but such loans have limited availability.

People with credit scores under 500 generally are ineligible for FHA loans. The FHA will make allowances under certain circumstances for applicants who have what it calls "nontraditional credit history or insufficient credit" if they meet requirements.

Homefront Mortgages will check your credit score before you borrow and help you address any issues. As a full Service Broker, Homefront Mortgages can shop rates and products from various lenders to find the best Mortgage Loan for you’re your needs. 

FHA borrowers can use their own savings to make the down payment. But other allowed sources of cash include a gift from a family member or a grant from a state or local government down-payment assistance program.

If you are the Charleston South Carolina Tri-County region and are interested in finding out if a FHA Loan is right for you, contact Homefront Mortgages in Summerville.  Homefront Mortgages services, Summerville, Mount Pleasant, Goose Creek, West Ashley and the entire Charleston area.