If you’re wondering whether or not FHA loans in Farmington Hills, Michigan are worth pursuing, talk to an expert with Gem Home Loans. We’re unlike any lender you’ve ever experienced. We won’t selfishly try to steer you toward a specific program because it will make us a lot of money. Instead, we will always keep your financial situation in mind when recommending a course of action. The reason we do this is because we want you to be completely happy, and be completely confident in your ultimate decision.

Basic Info on FHA Loans

FHA Loans Farmington Hills, MichiganThe Federal Housing Administration backs FHA loans. That means that if a borrower defaults on a loan for any reason, the FHA pays the lender. As a result, lenders tend to look at this kind of loan more favorably than a conventional loan – and that makes it easier for people to get approved.

The FHA and HUD (Housing and Urban Development, another governmental agency) set all regulations and requirements as they pertain to FHA loans. This kind of program is great for people who don’t have the money for a big down payment, as well as people who are buying a home for the first time.

You might think there is only one kind of FHA loan, but there are actually quite a few. Here’s some information on each of them.

  • Section 245(a) – This is a loan that might be a good option if you expect your income to go up as the years go by. You’ll have lower payments at first, and then those payments will go up as your income increases.
  • Home Equity Conversion Mortgage (HECM) – This is also known as the “reverse mortgage” program, the one you’ve undoubtedly seen advertised on TV. In a nutshell, you can participate if you’re 62 or older. You’ll be getting a loan based on the equity you’ve built in your home. Some people choose to receive a specific amount of money each month, while others prefer to get a line of credit. Still others choose a combination of the two options. Whatever you choose, you’ll still retain the title to your home.
  • 203(k) – An FHA 203(k) loan is for home improvements. You can use it in a number of different ways, such as adding a new room, renovating your kitchen or a bathroom, or something else.
  • EEM – This stands for Energy Efficient Mortgage. It’s fairly similar to a 203(k) loan, but it’s designed for people who are upgrading their home in a way that will reduce their monthly energy bills. You could, for instance, use an EEM loan to purchase an energy efficient heating and cooling system or to install solar panels.

Is an FHA Loan Right for You?

For a lot of people, an FHA loan is a no-brainer. But that doesn’t mean that it’s for everyone.

You can have a lower credit score and get approved for an FHA loan – as long as your score isn’t lower than 580. That will allow you to get into your new home with only a 3.5 percent down payment. If your score is lower than that, however, you’ll probably have to put down at least 10 percent. Also, you’ll have a hard time getting this kind of loan if you plan to buy a fixer-upper that you want to sell at a later date. In order to qualify, the home would have to meet certain standards.

Contact Us

A Gem Home Loans professional is ready to answer any questions you may have about FHA loans in Farmington Hills, Michigan. Use our online contact form or call (248) 780-1030.