As you are researching financing options when trying to purchase your first house, it can be quite dizzying. With so many choices on the market with various pros, cons and requirements, trying to make the right selection can be incredibly stressful. However, mortgage lenders in Atlanta recommend FHA loans for a first time home buyer program in GA because they have many advantages over conventional loans.
At BrightPath, we will use our professionalism and passion for helping others to get you the financing you desire.
What is the Difference Between FHA Loans and Conventional Loans?
The main difference between FHA loans and conventional loans is that they are backed by the Federal Housing Administration (FHA). Since they are insured by the government, they can afford you the opportunity for lower costs and potential financial relief that cannot be granted by conventional loans that are not covered by a federal agency. Conventional loans include a variety of adjustable rate mortgages, fixed rate mortgages, jumbo loans and more.
FHA Loans Have Easier Eligibility Requirements
FHA loans are a great first time home buyer program in GA because they are easier to qualify for compared to conventional loans. If you have a credit score of 580 or above, you can put down as little as 3.5% with an FHA loan. However, even with a lower credit score of 500, you could still be eligible for a 10% down payment. With conventional loans, you will usually need a credit score of 620 or more just to qualify. If your score is lower than that, you will have to pay a higher interest rate as compared to an FHA loan. Also, conventional loans require a 20% down payment, which may not feasible if you lack the savings or income.
Get Better Deals and Savings With FHA Loans
FHA loans have the potential to grant you better deals and larger savings compared to conventional loans. Since they are insured, they pose less of a risk to the borrower because the government will cover the losses if you default on the loan. As a result, borrowers are often willing to give you a better deal than they would with conventional loans where their personal risk is higher. Also, closing costs tend to be lower with FHA loans than conventional loans because the Federal Housing Authority will allow builders and sellers to cover certain costs that would normally be out of pocket for you. These include expenses related to pulling credit reports, appraisals, title payments and more.
FHA Loans Provide Optimal Refinancing
For a first time home buyer program in GA, FHA loans offer the easiest refinancing option with the FHA streamline refinance. This type of loan allows you to lower your interest rate and mortgage payment if you already have an FHA loan. It has fewer documentation requirements including no credit score or income verifications. While there are refinancing options associated with conventional loans, their eligibility requirements will be much more stringent compared to an FHA streamline refinance.
BrightPath Will Find You the Right First Time Home Buyer Program in GA
If you are ready to purchase your first house, we will be there to guide you through the entire process. Using our comprehensive analysis, we will give you the answers you need to make the right choices that support your goals for your home and your future.
Contact us today to schedule a free consultation.
At BrightPath, we are dedicated to making your dreams of becoming a homeowner a reality.