From: Compass Mortgage
By: Laine Smith
Buying a home can come with an overwhelming amount of choices. What school district do you want to purchase in? Who should you choose for a real estate agent? How much can you afford to spend on your home purchase? Just like choosing a home style, there are several loan types and programs made to benefit a wide range of homebuyers.
Determining what loan type is best for you depends on several factors, including your income, debt, property type, reserves, down payment, credit score, etc. Here are a few of the most common types and their benefits.
Good for borrowers with a low down payment, lower credit score
FHA loans are often referred to as the “first-time homebuyer loan”, specifically because of their low down payment requirement. An FHA loan’s 3.5 percent down payment requirement can come from the borrower’s own funds, can be gifted by a family member or come from a grant from a state or local government down payment assistance program.
Compass Mortgage has the ability to finance FHA loans to eligible borrowers with credit scores as low as 560 (with a higher down payment requirement). FHA loans also allow borrowers with limited credit to build credit histories with non-traditional trade lines, such as utility payment records, cell phone payments, rent, etc.