Even though FHA loans aren’t particularly strict, borrowers still need to follow their payment schedules. FHA loans for first-time homebuyers usually set a maximum payment of 3.5 percent of the appraised value of the property. If the borrower misses his payments, the loan officer will send him a notice before defaulting on the loan. After receiving the notice, the borrower has three days to either submit explanations for why he didn’t submit his payments or face some action on his credit scores. You may want to check out Kansas City FHA loans for more.
Aside from having a good FHA credit score, you also need to have an acceptable income to qualify for these loans. A borrower can use the loan amount as the down payment if he is purchasing his first home. But, the amount of the mortgage loan still depends on the lender’s policy. There are also lenders that allow down payments of up to ten percent of the total purchase price. A ha-approved lender may also allow up to twenty percent down payment for your second or third home.
When you get approved for this type of mortgage, you get extra protection in case you find yourself unable to make your monthly mortgage payments. You are then allowed to borrow up to the maximum amount allowed by the FHA. This helps you save on costs associated with home foreclosure. Even if you can only afford a portion of the down payment, you’ll still be able to own your house faster because the lender will waive the remainder.