Iowa is a great place to live. Between the safe neighborhoods, low unemployment rates, and a cost of living which rises above most other places, owning a home in Iowa is a great investment. Navigating mortgage terms and requirements, however, can be a bit overwhelming.
Financing options are many and diverse. Which one is the right one for you? It may take some doing, but a Newton, IA FHA loan is often the right mortgage loan for most people. At Compass Mortgage, let our experienced team of home mortgage experts guide you to your best loan.
There are many advantages to a Newton FHA home loan compared to a conventional loan. Many Iowans are turning to FHA loans to finance or refinance their homes. Benefits of an FHA loan in Iowa include:
FHA mortgage loans in Newton are government-backed and insured by the Federal Housing Administration. Through the years, more and more people are becoming homeowners. Not all of them have a conventional mortgage, which is the traditional mortgage loan. With an FHA loan, requirements to secure a mortgage are looser than conventional loans, which has made it easier for more people to find their way into their own homes. Some of these regulations include the following.
Down Payments Are Typically Low with an FHA Loan – Most borrowers will never put down more than 3.5% as a down payment on a home. As long as you know the purchase price of the home you want, you simply multiply that number by 3.5% and you have your down payment number.
Interest Rates Can Be Lower for an FHA Loan – Interest rates right now are at historic lows, and you do not want to miss out on a low interest rate for your Newton, IA FHA loan. Often, the interest rate for an FHA loan is lower than what you expect from conventional loans.
FHA Loans Come in All Shapes and Sizes – You can do a fixed-rate loan, an adjustable-rate loan, or others. A fixed-rate will never change throughout the duration of the loan, no matter if other circumstances change. An adjustable-rate loan means the interest rate can go up or down based on different variables in the loan agreement. Knowing when your adjustable-rate loan will increase is an important factor. For all your questions about mortgage loans, simply contact our Newton FHA loan lenders.
FHA Loan Requirements Are Easier to Take – The one thing that stands in the way of most loan approvals is your credit score. You can be someone who faithfully pays bills every month but if a circumstance comes along, such as unexpected medical bills, an illness, or unemployment, suddenly your financial situation can feel like you’re on thin ice. With a Newton FHA home loan, your credit score needs to be 580 or above.
You Will Be Required to Carry Private Mortgage Insurance (PMI) – This small additional cost added onto your monthly mortgage payment is required, because this is a government insured loan. In the event you can no longer make payments, the lender is insured against loss with the private mortgage insurance.
FHA Loans Once Took Months to Complete – Those days are behind us. Most paperwork, including your initial application, is completed online with signatures applied the same way. Newton FHA home loans should take no longer than a conventional loan to complete, and close, for you and your family. Usually within 30 days you will be looking at a closing date.
Keep in mind that paying rental money each month will never help you to build up equity in your place of residence. When you own your own home, it is a different story altogether. Your monthly mortgage payment is going towards equity in your home. In 10 years or so, you can refinance a higher-rate mortgage or just pull money out of equity to upgrade your home and property. It is always a win-win for the homeowner.
Your family deserves the very best. At Compass Mortgage, we give you an easy and stress-free mortgage experience. We go above and beyond for you. Contact us today.