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Did you know the FHA loan programs are offered by private lenders and not the Federal Housing Administration? That means the lenders fix the eligibility requirements and issue the mortgage. For this reason, finding the best FHA lender is equally important as the loan program. However, it is an overwhelming task when you are new to the process. The Federal Housing Administration does not directly issue the mortgage but only insures a portion for the lenders.
A few key factors are behind coming across the best FHA lenders in Houston. Since buying a home has been a crucial turning point in life, the right preparation is a necessity. The loan officers do not usually follow a strict lending requirement and have attempted at solving the housing crisis. If you do not prepare for the ideal lender, the upward prices might leave you in a difficult situation. The government-backed loan program undoubtedly makes homeownership much more attainable.
The 3.5% down payment is a boost for many homebuyers. When you are interested in getting a home loan, you would not like to get into trouble for qualifying. So, the article sheds light on the necessary tips on how to find the best FHA lender in Houston.
Shop for Different FHA Lenders
Every FHA-approved lender comes with different rates and fees. They have lenient requirements for qualifications, but the criteria always vary. It is highly recommended to compare the FHA mortgage rates with 3 lenders. Your local credit union or bank might also approve of an FHA loan, you never know. A helpful FHA mortgage lender offers meaningful and apt advice. So, the lender also aims at guiding borrowers for long-term and short-term goals. Additionally, you should pick a lender who can compare the long-term fees between conventional and FHA loans. Remember, every FHA loan has a mortgage insurance premium. You have to pay 1.75% of the mortgage amount as an upfront mortgage insurance premium.
Get to Know the Closing Costs
The HUD looks over the FHA loans and puts a limit on the closing costs between 3% and 5% of the mortgage amount. The guidelines laid out by the Federal Housing Administration also permit sellers to pay a particular amount for the closing costs. If the closing costs are included in the loan amount, you may be stuck with a higher interest rate. In case you are not confident about your financial situation, you can ask the professionals about down payment assistance programs.
In the end, the best FHA lenders in Houston offer a competitive interest rate. However, the fact you cannot cancel private mortgage insurance might make you re-think your decision. Of course, you can avoid the PMI when you are willing to put down 10% of the loan amount. The FHA mortgage insurance will be unavailable after 12 years. Look at every side before finding an FHA lender in Houston. The FHA loans are not right for everyone. Make sure if it is the ideal choice!