Reasons to Buy a Home With an FHA Mortgage
September 10, 2019
Are you weighing your options as a renter or home buyer? There are some great reasons to purchase a home with an FHA mortgage rather than renting.
Buy a Home With an FHA Mortgage When it Makes Less Financial Sense to Rent
If your rent every month is costing you more than a mortgage would, does it make more sense to buy? There is no set answer to this question since much depends on the housing market you live or want to live in.
That said, many renters decide it’s time to own instead of rent; they are tired of not being able to make changes to their living space and want the freedom of home ownership rather than the insecurity of lease expirations, increasing rent, etc.
Buying a Home With an FHA Loan Means Future Equity
When you rent, you get zero equity in the property you occupy. When you buy a home with an FHA mortgage loan, over time your property values will go up and you will get more equity in your home the lower your principal loan balance gets.
This means you have a potential for cash out refinancing later on, or a reverse mortgage. You can also refinance into a lower interest rate or mortgage payment using an FHA-to-FHA Streamline Refinance loan down the line.
Owning a Home Means Potential Income
Those who buy a multi-unit property with an FHA mortgage loan can rent out the unused units of the home and generate income as a landlord.
However, you will be required to own and occupy the home as your primary residence; occupancy is a condition of FHA home loan approval.
Owning a Home Is an Investment
Buying your home at today’s prices and selling it later down the line in an improving housing market could mean more money than you expect on the transaction (depending on the state of the market where you sell the home, and other factors).
It’s important to recognize that your home could be worth a lot more over the years than you anticipate, assuming housing market conditions are favorable to that sort of increase in property values.
Some borrowers take a distressed home and repair it to be in far better condition than when they purchased it; buying a fixer-upper using an FHA 203(k) Rehab loan could set you up for a good return on your investment if you put the home back on the market later on down the line.
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RELATED VIDEOS:
Keep Your Eyes on Your Loan Balance
Learn About FHA Loan Prepayments
Taking Out a Home Loan Makes You a Borrower
Buy a Home With an FHA Mortgage When it Makes Less Financial Sense to Rent
If your rent every month is costing you more than a mortgage would, does it make more sense to buy? There is no set answer to this question since much depends on the housing market you live or want to live in.
That said, many renters decide it’s time to own instead of rent; they are tired of not being able to make changes to their living space and want the freedom of home ownership rather than the insecurity of lease expirations, increasing rent, etc.
Buying a Home With an FHA Loan Means Future Equity
When you rent, you get zero equity in the property you occupy. When you buy a home with an FHA mortgage loan, over time your property values will go up and you will get more equity in your home the lower your principal loan balance gets.
This means you have a potential for cash out refinancing later on, or a reverse mortgage. You can also refinance into a lower interest rate or mortgage payment using an FHA-to-FHA Streamline Refinance loan down the line.
Owning a Home Means Potential Income
Those who buy a multi-unit property with an FHA mortgage loan can rent out the unused units of the home and generate income as a landlord.
However, you will be required to own and occupy the home as your primary residence; occupancy is a condition of FHA home loan approval.
Owning a Home Is an Investment
Buying your home at today’s prices and selling it later down the line in an improving housing market could mean more money than you expect on the transaction (depending on the state of the market where you sell the home, and other factors).
It’s important to recognize that your home could be worth a lot more over the years than you anticipate, assuming housing market conditions are favorable to that sort of increase in property values.
Some borrowers take a distressed home and repair it to be in far better condition than when they purchased it; buying a fixer-upper using an FHA 203(k) Rehab loan could set you up for a good return on your investment if you put the home back on the market later on down the line.
------------------------------
RELATED VIDEOS:
Keep Your Eyes on Your Loan Balance
Learn About FHA Loan Prepayments
Taking Out a Home Loan Makes You a Borrower
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