3 Myths about the Popular 500 Credit Score Home Loan in Houston

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Have you been hearing these things? Then you need to redo the research for FHA loans. The Federal Housing Administration introduced the mortgage program to encourage homeownership in the wake of the Great Depression. After so many decades, the loan option seems viable and useful. Borrowers with bad credit may not get through the application process of a conventional mortgage. Sounds good, right?

If you bear these myths in your mind, you might be on your way to lose a sweet deal. FHA programs undergo a difficult time getting past the myths. As a result, thousands of borrowers fail to take advantage of 500 credit home loans in Houston. After all, think! Is there any other loan program with better loan benefits? Unless you are a veteran and eligible for a VA loan, you have no other choice.

So, let’s go through the common myths before making an informed decision about FHA loans.

Myth #1: Stellar Credit is Necessary

On the contrary, the minimum credit requirement is 500 unlike any other mortgage in the market. Lenders definitely want a great score – if you do not have it, it’s not the end of the world. A better score means the affordable interest rate and terms. Speaking of FHA loans, the mortgage rates are competitive. You can own an average credit score and still have chances to negotiate an offer. Private lenders assess different factors including your income. In case you have low credit scores for a particular reason, you may have to send a letter detailing it.

Myth #2: FHA Loans are for First-time Homebuyers

There is no specific restriction on who can apply for an FHA and cannot. First-time homebuyers are widely interested because of the minimum down payment requirement. The program needs only a 3.5% down payment of the loan value if you have a credit score of 580. Also, the first-timers can benefit from the income allowance. FHA-approved lenders allow grants and down payment gifts. Remember, anyone can be a first-time homebuyer if he or she has not owned a property in the last 3 years.

Myth #3: FHA Appraisals are a Headache

From where this myth has circulated might be hard to pinpoint – there’s nothing to worry about. Government-backed loans like VA programs require an extra inspection. Minimum Property Requirements might be what the VA buyers often need to undergo. Nevertheless, FHA loans do not make you worry about these additional inspections or appraisal obligations. The basic requirement is that the house is livable, has a functional HVAC system and running water, and can survive many years.

In the end, FHA loans can prove to be wonderfully useful for future homeowners. Look around before deciding on a lender. Definitely, weigh the pros and cons. You can also get quotes to know how expensive the process is going to be. But don’t forget to do a lot of research!

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