by Tim Storm | May 27, 2016 | Uncategorized
In Orange county, the FHA loan program is extremely popular amongst first time homebuyers compared to other mortgage programs. What many Orange County home buyers don’t always realize is that the FHA program can be the best home financing option for move up home buyers as well. Reasons for this include flexibility in underwriting guidelines, credit, and down payment. When is FHA Better Than Conventional Financing? FHA allows for approved lenders to provide loans with very low down payments to borrowers with less than perfect credit scores. The minimum down payment required is 3.5% of the loan amount and can be provided to borrowers with a credit score as low as 580. The FHA loan limit in Orange County in 2016 is $625,500. This means an Orange County home buyer can use FHA financing to buy a home up to $648,000 with only 3.5% down, which is better than any other Conventional loan program. The only program better than that is VA. (You would need to be a qualified active or retired military Veteran). The FHA program also has many other beneficial aspects for potential borrowers. Interest rates with an FHA loan are much lower than a majority of other programs. FHA also allows the down payment to be a gift from a source like a family member or charity. Because interest rates and loan pricing tends to be better with FHA than Conventional loans, it is easier for Orange County FHA lenders to cover the closing costs using a lender credit (which involves increasing the interest rate). If a borrower were to experience an extreme financial hardship, FHA...
