Many who are entering the home market are well aware that the FHA program is one of the most prominent loan types available, especially for first-time homebuyers. Did you realize, though, that even within the FHA program realm, there are multiple different sub-types of loans that might be ideal for you?
At Integrity First Lending, we're happy to offer a wide range of FHA loans to clients throughout Salt Lake City and other parts of Utah, including first-time buyers who can benefit significantly from the low interest rates that typically are available through this program. What are the different types of FHA loans out there, and which is ideal for your situation? Here's a rundown.
Also known as the FHA 203b loan, this is the most common form of FHA loan out there. It allows for the purchase of a standard 1-4 family home that will be used as a primary residence, providing that the buyer qualifies.
FHA purchase loans come with several benefits that make them ideal for many first-time buyers. First, they can be easier to qualify for than other loan types since there are no income limitations tied to them. Second, FHA purchase loans allow for maximum flexibility because you're able to use the money to both purchase and improve your home, or just make repairs or renovations that might be required by you or a previous homeowner. And of course, because they offer interest rates as low as 3.5%, they can help you save a significant amount of money on both monthly payments and total interest over time.
There are a few different forms of refinancing, from those that offer lower rates to those that change your rate format -- and even those that allow for a cash-out of your equity in the home. Keep an eye on this space; next month we'll dig further into each of these options at your disposal if you already are paying an FHA mortgage for your home.
For those purchasing a home that requires significant repairs or renovations, the FHA 203k rehab loan might be your best option. This loan allows you to borrow the amount required for the purchase price of the home, but also adds additional funds for the rehab. Once the renovations are completed and the inspections have been passed, your home is appraised and you can use those funds to pay back the loan as part of your purchase.
Finally, the FHA loan offers a one-time opportunity to borrow money to both purchase a lot and pay for construction costs on a new home. Because of the close timing, you're allowed to borrow a higher amount on this loan than is typical with other types.
For more on the different kinds of FHA loans out there and which might be best for you, or to learn about any of our mortgage rates or broker services in SLC, speak to the team at Integrity First Lending today.
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