This type of loan can often help someone improve credit scores and build a safe, secure, and reliable lifestyle.
When it comes to buying a home, understanding and considering all the different types of loans and mortgages can be overwhelming. Many people begin looking for their dream home without fully understanding what they can afford or are approved to buy.
The team of Better Rate Mortgage helps St. Louis homebuyers plan for all of their housing needs. Our expert team can advise you on financing and mortgage options that suit your needs. One question we are frequently asked is about FHA loans.
The Federal Housing Administration (FHA) is trying to help those who may be considered “high risk” buyers by providing insurance to lenders willing to offer mortgages to help them secure a home. This could include individuals who have had financial problems, low credit scores, or little- to no-savings for a down payment. This type of loan can often help someone improve credit scores and build a safe, secure, and reliable lifestyle.
There are two main types of FHA loans for potential St. Louis homebuyers, depending on the type of home you plan to purchase. These are the FHA 203B and the FHA 203K mortgages.
The FHA 203B is available for individuals who buy a move-in-ready home or do not need any repair work. This type of loan is perfect for those with poor credit history and low incomes. It is still very possible for buyers with a credit score of 580 to get approval for a mortgage with as little as 3.5 percent down. If you can put more money into the down payment, you may even be able to get approved with a lower score.
The FHA 203K, however, is for homes that specifically need repair work, demolition, or other construction services. In some cases, this type of loan can be given to those purchasing a foreclosed property. The loan would be based on the total project cost and a set down payment. In the St. Louis area, this type of loan is good for those looking to flip houses, start businesses and quickly turn a project into a profit.
FHA Condo Loan
In Missouri, individuals can also get FHA loans for approved condo communities. The advantages and requirements are similar to those of a homebuyer in terms of approval needs and rates. A condo is perfect for single couples or those who do not wish to maintain or care for every repair. Throughout the state, there are 17 cities with pre-approved FHA condo locations, with the most in St. Louis, as well as Kansas City and Ballwin.
Contact Better Rate Mortgage
As a homebuyer in St. Louis, let the team at Better Rate Mortgage help you land the home of your dreams. We are the experts in lending and mortgage needs. Call us at (314) 361-9979 to get started.