The benefits and advantages of a FHA kiddie condo loan are quite the buzz in the mortgage market gossip. The FHA offers great programs for first time home buyers, but they don’t just offer benefits to first time home buyers. The FHA can help anyone with extenuating circumstances and even those who may think they are ineligible for help and the kiddie condo loan is great for those college students buying for the first time. If you’re unfamiliar with the FHA home loan and the terms, it’s a good idea to research the benefits in order to determine if it’s the right option for you.
More Lenient Credit Guidelines
One great advantage to the FHA kiddie condo loan is the leniency it offers in regards to the credit requirements. Most conventional loans will require a credit score of 680 or higher in order to be eligible for a low interest rates. The FHA loan however, focuses on more of your credit history than your actual score. So, your score is irrelevant to the qualifying process. What lenders are typically looking for are late payments and any accounts that are delinquent.
Little to No Money Down
Many people have a hard time with being able to afford the closing costs on their home loans. Most FHA loans will allow a lender to cover the closing costs. This is great news for you, this means your closing costs can be rolled into your mortgage and leaves you will little or even no money due at closing. Most loans have low closing costs around 3.5%, but even that much can be too much for some people. The FHA allows closing cost funds to be gifted from a friend or family member if need be-as long as you don’t have to pay it back. If you’re also struggling with paying the upfront mortgage insurance at closing, usually around 1.75% of the loan amount, this can also be rolled into your new mortgage.
Debt-to-Income Ratio Flexibility
FHA kiddie condo loans don’t have quite as strict rules regarding your Debt to income or DTI ratio. Meaning, if you are over the conventional limits, you may have other options with a FHA loan. This can be a great option for those borrowers who have more debt than they should, yet know they can afford a mortgage payment. The borrower will need to show proof that they hold a stable steady job and have a somewhat decent credit history that doesn’t show any late payments.
Refinancing a Kiddie Condo Loan
If you want to refinance your kiddie condo loan into a lower rate in the future, the process with the FHA makes it much simpler. You won’t be required to go through all the same long steps as you did when you first applied for the kiddie condo loan through the FHA. You won’t be required to verify your income or employment and your credit won’t even be looked at. All that’s required to refinance is proof that the refinance would in some way decrease the interest rate and you’re approved.
FHA Kiddie Condo Loans are extremely beneficial for many college students and other borrowers. You don’t have to be the average home owner or have excellent credit. As long as you have steady income the FHA could have a loan program that is beneficial to you, even if the kiddie condo loan isn’t for you, the FHA offers many other home loan programs.