We Believe in Affordable FHA Mortgage Loans
At Guardian Savings Bank, we do everything we can to help families own a home. FHA loans are a great way to make your dream of a new home happen. You can count on our loan officers to guide you through every step of the home buying process and treat your money as if it’s their own.
What is an FHA Loan?
The FHA loan was created by the Federal Housing Administration in 1934 to make homeownership more accessible for families. This type of loan is an attractive option because it features low down payments, flexible credit requirements, and greater purchase power. If funds are limited, an FHA mortgage can help a homebuyer finance up to 96.5% of their home’s purchase price.
Is an FHA Loan Right For Me?
If you’re looking for a home mortgage, an FHA loan may be right for you. Let’s take a close look at several of the many benefits of financing a home through an FHA loan. This type of loan is a great option if:
- You do not have a 20% down payment.
- You have been gifted money that you would like to use for your down payment.
- Your credit score isn’t the best.
- You would like a fixed interest rate.
- You have had a recent bankruptcy, foreclosure, or another serious financial burden.
- You plan on paying off your house early and don’t want to face any penalties.
The Benefits of an FHA Loan
Less Money Down
FHA loans require a low down payment of 3.50% for the purchase of a home. This is a great option for first-time home buyers. The path to homeownership is more attainable and can be a much faster option. An FHA loan can create the opportunity for homeowners to build equity into their home and less time saving for a down payment. Whether you are buying your starter home, next home, or forever home an FHA loan has options to get you in the home sooner.
Relaxed Credit Score Requirements
FHA loans offer opportunities to borrowers with a credit score as low as 580 and higher debt-to-income ratios. FHA offers fewer seasoning requirements for homebuyers with a bankruptcy, foreclosure, or other serious financial burdens.
Gifted Down Payments are Accepted
FHA accepts various sources of funds when it comes to down payment. FHA will accept a gift from a family member or an accepted down payment assistance program. When using a gift or down payment assistance program the borrower’s required funds can be reduced even more!
Competitive Interest Rates
Since FHA loans are backed by the government, they typically offer better interest rates than other mortgage loans. Even if you have less than desirable credit, you can benefit from a competitive interest rate. Homeowners can enjoy the comfort of knowing they have a fixed rate loan that won’t make any adjustments.
FHA loans do have a monthly mortgage insurance premium. The mortgage insurance can be considerably less than other mortgage loan programs. The difference is the mortgage insurance does not change based on your credit score. All homeowners obtaining an FHA loan get the same mortgage insurance premiums based on the loan amount and down payment. The mortgage insurance can be reduced even more when a homeowner makes a down payment of 5% or more.
FHA loans also have a premium that is paid upfront. The amount is 1.75%. This can be financed into the loan amount so you don’t have to worry about bringing any additional funds to closing!
No Prepayment Penalties
Fees that arise when you pay off your home too quickly are known as prepayment penalties. With an FHA loan, you can enjoy the freedom of paying off your home early without any consequences.
Seller Paid Closing Costs
FHA loans allow sellers to pay up to 6 percent of the loan amount to cover buyer closing costs. This can give you the chance to focus all of your efforts on saving for your down payment.
Why GSB?
At Guardian Savings Bank, we work hard to make homeownership possible without all the stress and extra fees.