If you are planning to purchase a home in either Teller or El Paso counties in Colorado, FHA loans may be available that can help you turn your dreams into reality. First though, there are some things you need to understand about Federal Housing Authority loans that can help you make smart financial decisions.
An FHA loan is designed to guard the interests of lenders against the potential of a loan default by the purchaser. The federal government assumes the risk of the loan and in most cases, offers the buyer more favorable loan terms with a higher dollar limit than he/she could otherwise qualify for. So, generally everyone wins.
Advantages
There are some distinct advantages to using an FHA backed loan to purchase your home. While there are definite limits on what you can borrow, you may qualify for a down payment as low as 3.5 percent. The loans are assumable, so if you decide to upgrade to another home before your mortgage has matured, the next buyer may be able to assume your favorable rates. That’s important, because the interest rates right now are close to the lowest they have been in decades.
FHA loans also offer some protection to the buyer should he/she come on hard times. This has the potential to protect you if you should lose your job or become ill. You have the ability to set your payment terms and if needed, you may be able to fund some improvements to your property under FHA. It is important to read your loan terms completely and seek the advice a real estate professional to clarify what your loan offers.
Disadvantages
Is there a down side? Well, it depends on your perspective, but FHA loans are often capped for specific areas. The insurance and premiums you pay may cost more than a private mortgage and you may or may not be interested in granting the government an interest in your home loan. It’s really up to you to do the research and understand the terms FHA is offering.
Currently, Teller and El Paso County FHA loans are capped at $284,500 for a single family home, $416,050 for a duplex, $502,000 for a tri-plex and a four-plex is capped at $625,000. So, if you have wanted to make your home dreams come true in either Teller or El Paso Counties, consider asking your lender for an FHA loan today!