With the new year many first time home buyers are looking for homes. As with the home search, many first time home buyers are searching for a loan package that meets there needs. One such solution are the government backed FHA loans. FHA loans are backed and insured by the Federal Housing Administration. FHA loans have loan limits, allowable closing costs and Debt to Income ratios that must be met. Some things to consider before applying for an FHA loan:
- Go to an FHA-approved lender or broker.
- Expect a low down payment 3.5%(this can be a gift)
- Borrowers may get more flexible lending terms.
- First-time home buyers have some advantages: they can have a non-occupant co-borrower.
- Sellers can contribute to closing costs up to 6%
- Large loan limits: Loan limits in King county are $567,500
- FHA approval will require documentation of income.
FHA loans may not be right for everyone, but the do have many features and benefits. First time home buyers should explore their options and see what best fits their needs. If you need an introduction to Rick Robertson a 5 star lender just contact me.