An FHA loan is a home loan backed by FHA and issued by FHA approved lenders such as Desert Springs Mortgage, LLC. This type of loan is ideal for first-time homeowners or people with bad credit. After understanding the FHA loan features, undecided borrowers will always opt for FHA loans over traditional loans due to lower down payment prerequisites, good interest rate offerings, and exceptional opportunities. Visit this link for more information.
Down Payment Prerequisites
While FHA loans can be obtained with as low as 3.5% down payment, traditional loans require a 20% down payment. The finances must come from FHA approved sources like a savings account, gift funds, investment you cashed in, or money you’ve saved at home. Read about Advantages of FHA Loan here.
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Typically, traditional loans require a borrower to have private mortgage insurance if the debtor doesn’t have at least a down payment of 20%. FHA loans are unique and need the payment of an Up Front Mortgage insurance. Borrowers must also have a yearly mortgage insurance premium.
If you are planning to apply for an FHA loan, call Desert Springs Mortgage, LLC for help. We will help you apply for the loan and make sure it is approved.