Alabama FHA Loan Home Loans

Would you like more affordable interest rates, a better chance at receiving a mortgage loan if you have had issues qualifying in the past and the ability to utilize the equity accrued in your home?  If so, you need to familiarize yourself with Alabama FHA loans.  Many people are using them to purchase a home, make renovations or even take cash out to use for many uses such as paying college tuition.  FHA loans are a powerful tool that has recently regained importance with borrowers across the nation.

Alabama FHA Loans Explained

Your average lender will be stricter about granting you a traditional loan than an Alabama FHA loan.  With an FHA loan, the FHA will guarantee a certain percentage, or in some cases your entire loan.  So let's say you are having trouble making a mortgage payment, or you go into default and the property is foreclosed.  The lender will get a percentage of money back specified by the FHA.  If the FHA guarantees the whole loan, the lender will not lose any money.  Thus, since they have a less likely chance of losing money on the loan, they will be more lenient in granting you an Alabama FHA loan.

Alabama FHA Loans Are Perfect for Those without Perfect Credit Scores

Perfect credit is not a requirement to receive an FHA loan.  The guarantee will make up for a credit score that is only average or even one that is below average.  While people with low credit scores are statistically more risky to default on a loan, that risk is offset because of the guarantee.

A big part of purchase a home is being able to meet the required down payment.  With a traditional mortgage loan, that down payment is 20% of the loan total.  With an Alabama FHA loan, the requirement is only 3% of the purchase price of the home. In contrast to traditional loans, the down payment can be given to you as a gift from a friend, relative, or even from a down payment gift program.  Also, in instances when you are refinancing, if you use an FHA you'll be able to refinance sooner than with a traditional loan.

Don't be surprised if you're granted lower interest rates when refinancing your mortgage with an FHA.  It all goes back to assumed risk.  Since risk is lower, lower interest rates can be offered.  The more secure the loan, the better the rates you will get.

Finally, let's talk about financial emergencies.  With a traditional mortgage loan, you have little resources offered to you by the lender to help you recover from your crisis and still keep ownership of your home.  FHA loans can offer more support in extreme circumstances.  There are specific programs to help you retain ownership, even if you are at the risk of defaulting on your loan or are having trouble making mortgage payments. With an Alabama FHA home loan, if you feel you are in trouble, you can contact them and ask for their help in dealing with your situation.  A traditional lender may have already sold your mortgage to another company and will never be in touch with you again, whereas an FHA loan offers an ongoing relationship where you can contact the original lender (FHA) at will.

malcapmortgage.com proudly serves: Birmingham, Montgomery, Mobile, Huntsville, and Tuscaloosa in addition to many other Alabama cities.