Build Or Buy?
November 2, 2024
The other FHA construction loan option, the one-time close mortgage, comes in here. This option is for those who want to approve floor plans, have a say in the types of materials used to build the home and choose its features.
Both loan types require the same low down payment of 3.5% and, depending on your downpayment, loan term, and other variables, require mortgage insurance for either 11 years or the lifetime of the mortgage.
Is A One-Time Close Construction Loan Right For You?
An FHA construction loan, often called a "one-time close" loan, combines construction financing and a permanent mortgage into a single transaction, approval, and loan closing day.
The borrower must choose contractors, approve floor plans, and work with the lender and builders to complete the project.
You should have plans for a temporary living space during the construction phase if needed. In typical cases, you won’t be able to live in your new home until the work is fully completed.
This loan suits anyone looking to build a custom home tailored to their needs and preferences. However, to qualify, you may need more cash reserves, higher FICO scores, and the ability to save up your own downpayment.
Is An FHA Purchase Loan Right For You?
An FHA purchase loan is a mortgage insured by the Federal Housing Administration (FHA). It is designed to help applicants with lower FICO scores and/or those who need a smaller down payment find affordable homes.
Creditwise, many feel FHA loans are more lenient compared to conventional loans. FHA loans allow the maximum financing for applicants with FICO scores of 580 or above, though your lender may have additional standards to meet.
Who is right for an FHA purchase loan? With its escape clause guarantee that you can’t be forced to buy a home that appraises lower than the asking price, those who need an affordable home who need a house, condo, mobile home, or even a fixer-upper should look into an FHA purchase loan.
If you need downpayment assistance, an FHA purchase loan may be the best option.
FHA Loan Articles
November 20, 2024Refinancing your mortgage offers a way to cash in on your home equity, potentially reduce your interest rate, or modify your loan term. Borrowers ready to consider have options including FHA loans and conventional loans.
While both provide avenues for refinancing, each loan type may be best for specific needs and financial circumstances. What are the differences between FHA and conventional refinance options?
November 14, 2024The home you want to buy might seem perfect, or it may have a few flaws that are acceptable in the grand scheme of things. But what about issues you can’t spot just by walking through the property a few times? A home inspection provides an unbiased, expert assessment of the property's condition, uncovering potential issues that might not be noticeable to the untrained observer.
November 12, 2024Escrow is an important feature of most typical FHA loans. An escrow account is a third-party account where borrowers deposit funds designated for property taxes and other uses. Requirements to use escrow accounts typically stems from a need to protect all parties involved in the transaction
November 2, 2024When it’s time to consider buying a home, the Federal Housing Administration (FHA) offers two popular options. One is the traditional FHA purchase loan many use to buy a house in the suburbs. But not everyone wants to buy an existing property. Some want more control over the design and configuration of the home.
The other FHA construction loan option, the one-time close mortgage, comes in here. This option is for those who want to approve floor plans, have a say in the types of materials used to build the home and choose its features.
October 31, 2024When buying a home for the first time, it helps to know how long the process can take. How do you know if your appraisal report is delayed if you don’t know how long the FHA allows for the process to be completed? How long does it take to get from the final offer to closing day? A “typical” FHA loan process may take up to 45 days from start to finish. Several factors can influence this timeline.
