How FHA loans in Texas works
FHA mortgage loans are issued by the approved lenders. FHA backs the loan and now you can borrow up to 96.5% of your home value. FHA loans don’t lend money for a mortgage. You will get a loan from FHA approved lender or another financial institute. To secure the guarantee of FHA, qualified borrowers are required to purchase mortgage insurance and premium payments are given to FHA. In this way, the lender bears minimum risks as FHA will pay to the lenders if somehow you default on the loan.
Do I Qualify?
To get qualified for FHA loans, borrowers are required to need at least 580 credit scores at a 3.5% downpayment. A borrower having 500 to 579 still can apply for FHA loans but at a 10% down payment.
Why FHA loans?
A borrower who can’t afford a higher traditional downpayment of 20%, and has a low credit score, or previous credit history is not good, then FHA loans in Texas are the best option for you. As only 3.5% FHA loan down payment is required.