Are you ready to buy your home in Fort Myers? Homeownership can seem out of reach, but with FHA loans in Fort Myers, it doesn’t have to be.
FHA loans backed by the Federal Housing Administration (FHA) though they’re issued by regular private lenders. Because they have federal backing, there’s less risk for the lenders, meaning they can offer better terms.
These loans were first offered during the Great Depression, and whereas before only about 40% of American households were able to own their own home, by 2004, that number had gone up to nearly 70%. If you’re ready to buy but aren’t sure you qualify for a conventional loan, there are some great reasons to consider an FHA loan.
4 Reasons to Choose FHA Loans in Fort Myers
1. Small Down Payments
One big hurdle in homeownership is down payments. When you have to come up with a 20% down payment, which is fairly normal for conventional loans, saving that amount of money can seem impossible. With FHA loans, you can buy with a down payment of just 3.5%.
2. Borrow From Friends
With conventional mortgages, lenders frown on gifts from friends or relatives to pay your closing costs or down payment. Lenders figure you’re a better risk if you’re putting your own money on the line. But what if your parents want to gift you a down payment on a home?
You could miss out on the perfect house just because you don’t have that bit of extra to cover closing costs, even if the seller is willing to split some of those costs with you or friends offer to cover it. With an FHA loan, you can use a gift for these costs, and the seller can pay as much as 6% of the loan amount toward your closing costs.
3. Don’t Get a Penalty for Repaying Early
Loans are pretty simple, in a sense. The borrower borrows the money, and the lender makes money by charging interest on the life of the loan. The longer the loan’s life, the more interest the lender makes. This makes some lenders very reluctant for you to pay off your loans early. If you do, it cuts into their profits, so they charge a penalty.
With an FHA loan, there are no penalties for paying off your loan early. If you sell your house and want to use that sale to pay off the loan, you won’t pay a prepayment penalty, either.
4. Improve the Property
In some cases, FHA loans can be used to pay for needed upgrades or improvements to a property you’re considering. If you’ve found the perfect place for you but can’t live in it until the bathroom gets a major overhaul, it can be a great bonus to be able to borrow a bit extra over and above the cost of the home to pay for this repair.
Learn More About FHA Loan Benefits
If you’re looking to buy a home, don’t be put off by strict requirements and harsh terms on conventional loans. Talk to Scott DiGregorio today and learn how FHA loans in Fort Myers can help you become a homeowner fast.