An FHA home loan can be used to buy or refinance single-family houses, two- to four-unit multifamily homes, condominiums and certain manufactured homes. Specific types of FHA loans can also be used for new construction or for renovating an existing home.
Herein, can you buy any home with an FHA loan?
2. You can’t buy just any house with an FHA loan. As long as the bank thinks you’re good for the loan, why wouldn’t you be able to buy any house you want? Well, the FHA has a few more hoops to jump through than conventional loans.
Beside this, how long do you have to live in an FHA home?
FHA borrowers must move into the home 60 days after the mortgage closes and must keep it as a primary residence for at least one full year.
How long does it take to get a FHA loan?
An FHA loan requires a down payment of just 3.5% of the home’s purchase price if your FICO score is at least 580. Though some lenders may require a higher credit score of 620 to 640. Other loan types eliminate the down payment requirement altogether.
Generally speaking, FHA loans might be a good fit if you have less money set aside to fund your down payment and/or you have a below-average credit score.
FHA loans are not for first-time buyers only. First-time and repeat buyers can finance houses with FHA mortgages. The FHA loan is often marketed as a product for “first-time buyers” because of its low down payment requirements.
Federal Housing Administration (FHA) loans are federally backed mortgages designed for homeowners who may have lower-than-average credit scores. FHA loans require a lower minimum down payment and a lower credit score than many conventional loans do.
A major drawback of FHA loans is the high cost of FHA mortgage insurance, which must be paid for the life of the loan if you make the minimum 3.5% down payment. FHA county loan limits also curtail your buying power, since they’re set at 35% below conforming conventional loan limits in most counties in the U.S.
FHA loans often come with higher interest rates than other loans, simply because they’re riskier. Since their credit score requirements are lower, there’s a bigger chance the borrower will default on the loan. To protect themselves from this added risk, lenders will charge a higher interest rate.