The year was 1968, Lyndon B. Johnson was President, Martin Luther King Jr. had just been assassinated, and the Fair Housing Act was being signed into law to prohibit discrimination in the financing of homes. 50 years later, not only is the government still dolling out justice, but the Federal Housing Association continues to provide fair mortgage options at historically low interest rates that have made them more valuable than ever.
Typically anywhere less than a 620 credit score would not be eligible for a mortgage loan, but there’s one exclusion: FHA Loans. Through the FHA program, a credit score as low as 500 can get you a loan. Depending on how much higher your credit score is from 500, the downpayment can vary from 10% to as low as 3.5%. That factor alone could save you thousands of dollars on the upfront costs when buying your home.
The FHA’s mortgage program is designed to empower homeowners with a better mortgage and the options available may surprise you. Every homeowner is aware of our grandfather’s mortgage, the 30 year fixed loan. What most people don’t realize is there are many more options including:
What is our favorite of the bunch? Hands down it’s the 15-year mortgage.
If you took out a 30-year mortgage on your home, you’re not alone. And you could be paying tens of thousands of dollars in unnecessary interest over the course of your loan. But not to worry. The Refinance program is designed to empower homeowners with a better mortgage.
A 15-year mortgage crushes a 30-year mortgage on two overlapping fronts: interest over time, and interest rates. A 15-year mortgage has lower interest rates than a 30-year and cuts the length of the interest’s growth in half. The bottom line: MorningFinance found that 72% of an employee’s monthly payment on a 30-year mortgage was pure interest. When a member of the Morning Finance team plugged his information into LendingTree’s secure platform, he was shocked by the result. By switching from a 30- to a 15-year fixed rate mortgage, he unlocked $159,447.09 in savings.
PRO TIP: Even if you have a 30-year mortgage, a reputable lender can help you switch to a 15-year. Calculate your new payment here ›››
When you refinance, you’ll receive a refund of any escrow you’ve accumulated. For our colleague, he received $1777 in a cash escrow refund and was allowed two payment-free months of blissful home ownership.
There’s only one way to know for sure if you can take advantage of this exclusive offer from the US Federal Housing Administration. See if you qualify for this exceptional offer by clicking on your state in the map below.