Fha and Home Loans: Help for a First Time Buyer

If you are attempting to obtain a home loan for the first time, you are probably wondering where to even begin in the mortgage process. Everywhere you turn, it seems like there are more decisions to be made, and you may not always know what the correct answers are. A mortgage lender, such as Alliance Financial Resources, will often be able to help with any questions you have about the mortgage process. In the meantime, it is important to perform some of your own research on obtaining a mortgage, including what types of home loans are available to you.



Aside from Alliance Financial Resources, one helpful resource in the mortgage process is the Federal Housing Administration, or FHA. You may have heard of this organization before; it is the only entirely self-funded government agency in existence, and is a very good source of support for those new to the mortgage process. In fact, FHA has a useful plan called the First Time Home Buyers program, which has requirements that are easy to meet for most first-time home buyers seeking a home loan.



First of all, this plan does not require a minimum credit score, which is good news for people who need a mortgage but do not have great credit. Instead, the FHA underwriter will focus on your overall likelihood of home loan repayment, judging from your entire credit history. If you have recently established new credit, this may override any negative history on your credit report. Such a comprehensive view of your credit history should help your chances of getting a home loan.



If you have declared bankruptcy in the past and think that means you are automatically exempt from getting a home loan, think again. FHA’s program allows Chapter 7 bankruptcies if they were discharged more than two years ago. Chapter 13 bankruptcies are also allowed, as long as you have been repaying on time for a year or more. You would also need your trustee’s approval, in this case. This program clearly brings hope to many people who previously thought a home loan was out of the question for them.



Another benefit of the First Time Home Buyer program is the very small amount of money needed to buy a home. The seller can pay up to 6% of the home’s sales price towards closing costs, and you do not even need a down payment in many cases, as you can get help through a down payment assistance plan. The program also does not require cash reserves in order to get a home loan, making it easier for people without a lot of savings to get a mortgage.



Clearly, the FHA is a crucial resource when it comes to obtaining your first home loan. The mortgage process can be confusing and certainly frustrating when you do not know what you are doing, which is why it is advantageous to know all the options available to you. It is important to find a mortgage lender that you feel you can trust, such as those at Alliance Financial Resources,who will answer any questions you may have regarding the FHA and mortgages in general.

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