Planning to Buy a Home With an FHA Loan?
May 1, 2022
There are some obvious things about getting a home loan, such as the need to shop around for the right participating FHA lender so you can compare loan options.
And then there are the not-so-obvious issues, such as considering the savings you would get from a shorter loan term or by paying for discount points upfront to lower your interest rate. You may not decide to exercise either of those two options but considering them and making the most informed choice you can is a very good idea.
But your home loan choices also include considerations that will affect your use and enjoyment of the home long after closing day.
Planning for the Future
If you are purchasing your first home, it’s entirely possible that you already know you won’t be keeping the home for the full loan term. And with that in mind, consider the future when selecting the size and type of property.
Should you pay more for a bigger house you don’t plan to keep very long? Should you pay discount points on a loan you won’t keep for the full term? These decisions can affect your financial bottom line long after closing day.
Examine the Local Area
The location of your home could be an issue depending on your needs to commute to a job, find daycare, and have proximity to grocery stores and other services. If you are starting a family, how close is your home to potential noise pollution like busy airports, major highways, or large construction projects?
The farther away from city services you get, the more travel times, historic weather patterns, and even the availability of towing or other roadside services might be factors to consider depending on how far away from them you might be.
If you are familiar with the area you are buying in you may know the answers to many of these questions already. But if you are moving to an unfamiliar city, there are questions you should ask about the location of any potential new home.
For example, you’ll want to know about noise issues (see above) excessive light pollution from a nearby big-box store, or major traffic and/or parking concerns.
FHA Home Loan Types
It’s also a very good idea to research lenders and the local area to see if a loan is available for the type of property you want to buy with an FHA mortgage. For example, some housing markets may not have a demand for condos, and some housing markets will not have much demand for manufactured housing.
Demand may drive the types of loans your lender chooses to make available. It never hurts to ask which FHA loan types your lender supports and which may not be possible in that housing market.
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And then there are the not-so-obvious issues, such as considering the savings you would get from a shorter loan term or by paying for discount points upfront to lower your interest rate. You may not decide to exercise either of those two options but considering them and making the most informed choice you can is a very good idea.
But your home loan choices also include considerations that will affect your use and enjoyment of the home long after closing day.
Planning for the Future
If you are purchasing your first home, it’s entirely possible that you already know you won’t be keeping the home for the full loan term. And with that in mind, consider the future when selecting the size and type of property.
Should you pay more for a bigger house you don’t plan to keep very long? Should you pay discount points on a loan you won’t keep for the full term? These decisions can affect your financial bottom line long after closing day.
Examine the Local Area
The location of your home could be an issue depending on your needs to commute to a job, find daycare, and have proximity to grocery stores and other services. If you are starting a family, how close is your home to potential noise pollution like busy airports, major highways, or large construction projects?
The farther away from city services you get, the more travel times, historic weather patterns, and even the availability of towing or other roadside services might be factors to consider depending on how far away from them you might be.
If you are familiar with the area you are buying in you may know the answers to many of these questions already. But if you are moving to an unfamiliar city, there are questions you should ask about the location of any potential new home.
For example, you’ll want to know about noise issues (see above) excessive light pollution from a nearby big-box store, or major traffic and/or parking concerns.
FHA Home Loan Types
It’s also a very good idea to research lenders and the local area to see if a loan is available for the type of property you want to buy with an FHA mortgage. For example, some housing markets may not have a demand for condos, and some housing markets will not have much demand for manufactured housing.
Demand may drive the types of loans your lender chooses to make available. It never hurts to ask which FHA loan types your lender supports and which may not be possible in that housing market.
------------------------------
RELATED VIDEOS:
Sometimes It Pays to Refinance
Don't Forget Your Closing Checklist
Monthly Payments Establish Good Credit
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