Making improvements to your home is an easy way to raise its value. With a FHA loan you could be able to include the costs associated with your home improvements with your loan. The Department of Housing and Urban Development’s 203 (k) program is one in which you can refinance your current home or even purchase a new one in need of improvements and include all costs in the loan.
Aside from being able to use it to invest in your new or current home, there are numerous advantages to using a FHA loan. First and foremost is the ease with which one can qualify for a FHA loan as opposed to more traditional types of loans. Because the FHA is simply guaranteeing your loan lenders will be more inclined to give you the loan you need to refinance your home. This means that lenders have considerably less to lose by extending you a loan, because if you do go into default and they do have to foreclose they will get their money back.
Another reason FHA loans are easier to get is due to the relaxed requirements. Good or perfect credit is not required by the FHA for one of their backed loans, which makes it a strong alternative to traditional loans, especially since typically predatory lending practices have come under increased public and political scrutiny.
Two more advantages of a FHA are the lower interest rates, which translates directly to no or low down payments. The lower interest rates means your monthly payments will be considerably lower. So much so that you can afford to finance more of the home and pay less in the down payment. Sometimes you can even finance the entirety of the home and wonâ€™t need a down payment at all.
Post contributed by Brandon Laughridge