
FHA Loan
FHA loans are an appealing choice for a wide range of individuals who are looking to purchase a home and have a moderate or low income. These loans offer numerous advantages to qualified homebuyers, including a reduced down payment requirement (as low as 3.5%), more affordable monthly premiums, and decreased closing costs. This makes them particularly attractive to both first-time homebuyers and those who have previously purchased a home but have limited income or a lower credit score.
Why an FHA Loan?
Low Down Payment
For individuals who meet the credit score requirement of 580 or higher, an FHA loan offers the advantage of a minimal down payment, starting as low as 3.5%. Alternatively, if the credit score falls below this threshold, a 10% down payment is necessary, which remains significantly lower compared to what is typically required for a conventional loan.
Flexible Debt-to-Income Ratio
Borrowers are granted the flexibility of having a higher debt-to-income (DTI) ratio. This means that they can allocate a larger portion of their monthly income, up to 50%, towards debt payments. This allowance for a higher DTI ratio sets FHA loans apart and provides borrowers with greater leeway when it comes to managing their financial
Low Credit Requirements
Among the various loan options available, FHA loans have notably lenient credit requirements. Vizion Mortgage, for instance, permits borrowers to have a credit score as low as 580, making it one of the lowest credit score thresholds among loan providers.
​
​
Low Cost Mortgage Insurance
For borrowers who make a down payment of 10% or less on an FHA loan, mortgage insurance is a requirement. Unlike traditional private mortgage insurance, this insurance cannot be canceled. However, it typically carries lower premiums compared to conventional options.
Steps to an FHA Loan:
