FHA loans in Bloomfield Hills, Michigan have helped many people get into the home of their dreams. It might be just the type of program that fits perfectly with your specific financial situation. While you might find that an FHA loan is the best route to take, there could be another program that’s even better. Let’s take a look at some of the benefits and drawbacks of FHA loans. If you have any questions whatsoever, get in touch with a Gem Home Loans representative. We’ll be more than happy to help you find the best possible option.
The Benefits of FHA Home Loans
A lot of people – particularly first time homebuyers – turn to FHA loans on a regular basis. This program is also a very good option for people who don’t have tens of thousands of dollars to apply toward a down payment. Also, if your credit score isn’t exactly where you want it to be, an FHA loan might be worth considering.
Here’s a quick look at some of the benefits FHA home loans provide.
- They’re affordable – In many cases, conventional loans – those not backed by the U.S. government – come with hefty down payments. These can be as large as 10 percent of the purchase price of the home or even larger. With an FHA loan, on the other hand, you will probably only have to come up with 3.5 percent. Also, a friend, a charitable organization or a family member can “gift” that down payment so you don’t have to pay a dime.
- Flexibility for those with lower credit scores – If you have issues with your credit score, an FHA loan might still make it possible for you to get into a new home. If your score is 580 or higher, there’s a very good chance you’ll be able to get approved. You’d probably need at least a 620 credit score to qualify for a conventional loan.
- Different housing options – You don’t necessarily have to purchase what would typically be regarded as a “traditional” structure in order to obtain an FHA loan. If you’re looking for a condominium or a manufactured home, you may also qualify.
The Drawbacks of FHA Home Loans
All loan programs have their advantages and disadvantages. These are some of the drawbacks associated with FHA loans.
- No vacation homes – If you’re thinking of getting an FHA loan for a vacation or investment home, you won’t qualify. FHA loans are only for primary residences.
- No flipping – There are certain standards that a structure has to meet in order to fall under the FHA loan program. If you’re thinking of buying a distressed structure to fix up and flip at a later date, you’ll have to look for a different kind of loan.
- Insurance – You’ll probably have to pay insurance premiums each month. However, once you build 20 percent equity in your new home, those payments will likely end.
Have Questions? Gem Home Loans Has the Answers
You will have to take a lot of factors into consideration when trying to obtain FHA loans in Bloomfield, Michigan. A Gem Home Loans expert can explain all of your options so you can make the best possible choice. Give us a call at (248) 780-1030 or use our convenient online form for more information.