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FHA Down Payment
|FHA Down Payment requirements are not as stiff as most conventional loans. There are programs that can allow you to pay as little as 3.5 percent of the purchase price to close a mortgage deal. With that much down payment amount, it becomes easy for anyone to obtain a home loan quickly, but the flip side is that you wouldn’t have much equity in your home.
Moreover, you will have to pay towards the mortgage insurance premium, which is what makes the Federal Housing Administration provide security to the lender should you default on your payments. You can use an appropriate calculator to estimate how much it would cost you to have an FHA-insured loan.
In most cases, the down payment is equivalent to a few months of rent you may be paying to your landlord. The monthly payment is also kept as low as to almost equal or a little over your monthly rent.
FHA Down Payment Requirements
The avail the low percentage of down payment requirements at a lender backed by the Federal Housing Administration, you need to follow some guidelines. The fist thing you must have is a very good FICO credit score. The minimum credit requirements set by the United States Department of Housing and Urban Development (HUD) is 580.
However, a typical lender would require even more credit score to offer you the best deal that also includes 3.5 percent down payment amount. Most lenders have raised the minimum credit score requirements from 620 to 640 in 2011. You need to shop around to find a lender that has less stringent rules regarding credit requirements for the lowest down payment.
It is even possible to use the fund you have received as a gift or explore the government grant programs to pay for down payment. For such sources of fund, verification is not required according to the FHA rules.
FHA Down Payment Assistance
The down payment amount, closing and all other costs and fees are clubbed together and included in the loan itself, thus making it possible for you to close conveniently and without having to spend much at the time of orignination. The FHA down payment requirements may differ in each state, depending on the availability of a particular kind of program in that state.
For example, the residents of Texas can get downpayment and closing cost assistance through homebuyer programs of Texas Department of Housing and Community Affairs. Similarly, the residents of California can find down payment assistance programs run by California Housing Finance Agency (CalFHA). Indeed each state has a different set homebuyer programs available in that state only. For more information in this regard, get information from the HUD website.