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What are FHA 203b Loans?
FHA 203b loans are the FHA loan program of choice for most people. You may use an FHA Section 203(b) fixed-rate mortgage loan to purchase new or existing 1-4 family homes, condos or townhomes, in either urban or rural areas. There are limits to the amount of money you can borrow under an FHA section 203b loan. But, I think they are reasonable.
The length of the loan (term) may be either 15 or 30 years. When you get a section 203b loan you make monthly payments.
I think that an FHA 203b loan should be the FHA loan of choice for most first-time home buyers because the take less out-of-pocket cash to get. The interest rate is slightly higher than most conventional loans but, in most cases, you only need to put up 3.5 percent of the purchase price as a down payment. And, to make it even better, in most cases, the closing costs may be borrowed from a relative, be money from another loan or may actually be included in your mortgage itself.
If you want to get an FHA 203(b) loan, you must have satisfactory credit, have enough monthly income to make the payments and have enough cash to be able to close the loan. You do not need to be a first-time home buyer to get an FHA 203(b) loan.
With an FHA 203b loan you can make multiple payments on each payment due date. If you do that regularly, you may be able to save thousands of dollars in interest over the term of you home mortgage and own your home a lot sooner.
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