To buy a home, you must be financially stable. If coming up with the full purchase amount instantly is impossible, then you should consider external financing. The good thing is that there are many service providers willing to help you financially. There are many mortgage loans with each aiming at satisfying the various market needs. FHA home loans are an example of the many mortgage products to choose from. They have government involvement through the Federation of Housing Administration (FHA). Owing to this FHA loan requirements are not that strict when it comes to who can qualify. This, however, does not mean that you should rush into making a decision to take this mortgage product. The following are some factors to consider before taking an FHA home loan in El Paso:
- Lender’s reputation – before taking an FHA home loan, make sure that the lender offering it has the capability to do so. This information can be obtained from their past clients or website’s feedback. Failing to carry out a study on the lender might result in future regrets. This is because unattractive performance might arise when it is too late to terminate the contract. Choosing a reputable lender for your FHA home loan needs will assure you of the service to expect in the future.
- The period you expect to live in the house – at times a decision to take a home loan might be more expensive. This is in comparison to renting. If, for instance, you expect to relocate in six months, renting is more affordable. You can choose to rent your newly acquired house but FHA loan requirements do not permit this. You have to permanently live in the house acquired. It is, however, important to understand that FHA home loans are transferrable. This means that you can resell your newly acquired house when the time to relocate comes. Your loan will then be transferred to the new homeowner.
- FHA loan requirements – before making a decision on taking any type of loan, it is important to consider the requirements that determine approval. For instance, FHA home loans require a low down-payment of 3.5%. You should have the required amount on hand before applying for this loan. If you cannot afford it, make sure you engage friends or family members who are able to. Additionally, you should know that these loans come with a need to pay mortgage insurance. Before signing the contract, make sure that you are comfortable with paying insurance throughout your loan’s term.
- Ability to pay – finally, you should consider your ability to make the necessary repayments. Do not commit to an agreement you cannot meet as this will result in a poor credit history. It is, however, important to note that if you cannot pay, the government will do so using your mortgage insurance premiums.
If you are 100% sure about taking a home loan, then go for it. Don’t make any decision if you are not completely sure. If you do, the consequences, especially in terms of cost, will be very harsh.