We get asked all the time if there is a way to buy homes in Colorado with low down payments and affordable rates even if you don’t have perfect credit.
You might be a good candidate for an FHA loan if that’s what you need.
What is an FHA Mortgage?
The Federal Housing Administration offers loans for homes, both first time buyer projects and repeat purchases. An FHA loan has low down payment requirements which allows more people to qualify than other lending institutions- making it an excellent option in the current housing market!
What are the Benefits of FHA Mortgages in Colorado?
Check out some of these Colorado FHA Loan advantages:
- Move into a new home now without a large down payment. The down payment for an FHA loan is between 3.5% and 10%. If your score is 580 or above, you qualify for 3.5% down. If it is between 500 and 579, you qualify for 10% down.
- Credit qualification for this type of loan is relaxed compared to requirements for conventional financing.
- Debt-to-income (DTI) ratio requirements for an FHA mortgage are likewise not as strict.
- FHA mortgages have more affordable interest rates than comparable conforming loans with no government insurance.
- Closing costs, when not paid for by the seller, have a low cap.
- Home purchase is not the only thing you can do with an FHA loan. You can also build a home, repair or upgrade one, or refinance a loan.
- FHA loans can have fixed or adjustable mortgage rates.
Are You Eligible for a Colorado FHA Loan?
Wondering if you can get an FHA loan? It’s possible! The low down payment, affordable mortgage rates and closing costs might be just what your budget needs.
- You do not need to be a first time homebuyer.
- You must be purchasing or refinancing a primary residence, not a second home.
- The minimum credit score required is 500.
- Your debt-to-income (DTI) ratio must be no higher than 56.9%.
- Document that you have been employed steadily for the past two years and that your professional life is stable.
- A clear credit alert interactive voice response system (CAIVRS) report is a must.
- Be ready to pay for private mortgage insurance (PMI) each month.
- A prior bankruptcy or foreclosure does not disqualify you after the waiting period.
Apply for an FHA Loan in Colorado Now
We want to make sure you get the best mortgage for your needs. Do an FHA loan sound like it might be right up your alley? Let’s find out! Please call (720) 640-7034 to schedule your consultation.