3 Myths to Know before Applying for an FHA loan 500 Credit Score Texas

Is your credit score a reason for your headache? You are about to opt for a home loan program and your credit score is 500. Well, not to worry. The FHA loan program is there in your rescue. It is a home loan program that is insured by the Federal Housing Administration and offered by the FHA-approved lenders. An FHA loan allows getting approval even with a 500 credit score.

So, what to wait for? Opt for an FHA loan 500 credit score Texas. But are you in doubt? Are the myths creating distrust in your mind? Then, you should know the reality before opting for the loan program. Here we have listed down a few myths on FHA loan programs and have tried to uncover the truth –

• You need a high down payment for an FHA home loan program 

It is a mere misconception while the truth is not so. Unlike conventional home loan programs that need at least 20% down payment to get the home loan approval, FHA needs a lower down payment. You can get this home loan approval only with a 3.5% down payment. This is why the first-time and low or middle-income group homebuyers prefer this loan program over others. Besides, you can look for down payment assistance programs to finance the 3.5% down payment. So, there is no reason to believe the truth blindly.

• You can opt for any lender for this loan program

No, this is not right. There are various mortgage lenders who offer different types of mortgage loans to the homebuyers; some of them even provide FHA loans. You should not opt for these lenders. They are not familiar with the guidelines of the FHA and most of the time, they involve other lenders in the matter, and so, you have to pay an extra charge. On the other hand, FHA-approved lenders are legally responsible to approve loans and so, they are familiar with the guidelines properly. They can also guide and help you. So, instead of opting for any lenders in the market, you should research the FHA-approved lenders and pick a reputable one for applying for the loan program.

• These loans only finance single-family home 

This is wrong too. There is no such guideline mentioned by the FHA that prevents one from getting loan approval for a multi-family home. Rather with this loan program, you can buy multifamily 4 units or 5 units home with a 3.5% down payment. It will be great for you if you have a large family. All that you have to do is to meet the eligibility criteria and come with the required documents. Once you are done with these, you can get the approval. So, would you still like to believe it blindly?

There are countless other misconceptions that surround the FHA loan programs. While some are partially false, others are complete. Being a wise borrower, you should delve deep into the matter and then decide whether to believe it or not.

Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.