Question:

Why are FHA home loans for first time home buyers recommended?

Answer:

FHA home loans are often recommended for first time home buyers as they are stable, predictable, government-backed loans that require little down payment and an average or even low FICO score as FHA loans do not use FICO scoring as a criterion for qualifying applicants.

Some Facts about FHA Home Loans for First Time Home Buyers

FHA home loans are not only available to first time home buyers. Actually, you could use FHA financing for purchase and refinancing as long as none of your FHA loans carries balance higher than 75%. Thus, you could buy a rental property with an FHA home loan.

FHA home loans for first time home buyers are not available with 100% financing. Rather, you could use gift money or another loan in addition to FHA funds to make it 100% financing.

FHA home loans may be streamline refinanced (that is, without any expenses to the borrower) into another FHA loan with better rates and lower monthly payment on principal and interest. If you are refinancing the mortgage of an investment property, you will have to pay for the appraisal.

If you have bankruptcy or foreclosure on your record, FHA home loans are available to you after two years from bankruptcy, and three years from foreclosure date. Your credit history since then must have been excellent.

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