Things you need to know about FHA loans

June brought some good news for the real estate sector in Texas. The sales of pre-owned homes in North Texas had seen the biggest year-over-year gain in 2014. In June of 2014, 9,481 houses were sold in this state, which were the largest single monthly sales ever recorded. Such a thriving housing market is creating a lack of inventory. Hence, home buyers may have to shell out more money to get their desired home due to the increase in property prices. As the market is full of new buyers who want to take advantage of this optimistic trend, the mortgage market is also witnessing a lot of activities. For these buyers, there is a wide variety of home mortgage options available. One of the most popular mortgage options for the first home buyers is an FHA loan.

The Federal Housing Administration or FHA loan program has specifically been designed for home buyers with low to moderate income. This loan is more lenient in terms of eligibility criteria such as credit score, borrowers’ income and outstanding debt. This program also allows a down payment of 3.5 percent, which seems generous considering the larger down payment requirement for conventional mortgages. In those mortgages, customers are expected to pay a significant amount of an upfront fee in addition to the monthly premium, which poses challenges to many borrowers.

FHA loans provide relief to home buyers who do not meet the typical eligibility criteria for traditional mortgages. With such benefits of this mortgage program, even the home mortgage lenders in Texas are ready to provide financing to buy a property.

Here are some of the features of an FHA loan:
Easier to get: In earlier times going for a home loan caused home buyers to go through confusion and taxing paperwork. However, things have changed now, and with a more streamlined application process and underwriting, mortgages get approved with quick turnaround time.

Limits of the loan: There is no specific maximum limit for an FHA loan. Instead, it is set according to different states, and it is based on the specific market condition.

Credit Score: FHA loans work in a different way than a traditional loan works when it comes to credit score requirements. There is no minimum requirement for the loan, and a homebuyer can still be eligible even if he has faced bankruptcy.

Available for all income groups: Though FHA loans are mainly sought by lower and medium income groups, there is no such restriction. If borrowers can prove their ability to pay, they can apply for this loan even if they belong to the high income bracket.

Mortgage processes can be complex and buyers better seek assistance from mortgage experts. They may need the services of a reputed home mortgage company to know more about FHA loans or any other suitable loan option. Such a company not only makes your work easier by finding the best mortgage option for you, it also provides assistance for a hassle-free loan application process.