Lower Credit Score Mortgages

FHA 580 Loan Program

Although most lenders require a much higher credit score, Buccaneer Mortgage may be able to pre-approve you with as low as a 580 middle credit score with 3.5% down. FHA or the Federal Housing Administration is the most commonly used product for First Time Homebuyers however FHA can be used by anyone who is purchasing or refinancing their primary residence even if they are not a first-time homebuyer. Even if you are looking to upgrade to a larger home you may qualify for the FHA product. The definition of a First Time Home Buyer is anyone who has not owned a property within the last 3 years, therefore if you sold your home or gave up ownership rights within the last three years you are considered a First Time Homebuyer.

The FHA loan only requires a 3.5% down payment and will allow the seller to pay up to 6% of the closing cost. Closing costs are the expenses such as insurance, title company fees, loan origination fees, lender fees, local and state taxes and appraisal costs. The FHA loan offers fixed or adjustable-rate mortgages and all products come without a prepayment.

Although the FHA loan is usually a great choice for First Time Home Buyers it is not limited to First Time Home Buyers. Anyone who does not currently have an FHA loan may use the FHA program to purchase a primary residence. FHA also does not have an income limitation however loan limits vary based on the area of purchase.

The FHA program is a government insured loan that requires the borrower to purchase an insurance policy on the mortgage in case they default on the loan. The insurance premium requires the borrower to pay a small monthly payment towards the premium and a one-time fee equal to 1.75% of the loan amount. The 1.75% is usually added to the loan and financed within the loan instead of becoming an additional closing cost. This insurance premium is completely different from the homeowner's insurance policy that is required by the lender.

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