Federal Housing Administration or FHA loans have been introduced for the people who buy their own household for the first time. Owning a property by making some investment is really a wise decision, mainly, when it is a household asset. This is because it not only provides shelter to your present, but secures your future too. How? Having an ownership of a household will entitle you to enroll for reverse mortgage schemes that have been designed and introduced to meet the essential needs and requirements of the old aged individuals after their retirement. Registering for these plans enable the retirees to earn a hefty amount in lieu of their own property.
Certain features exhibited by the FHA loans that drive the finance seekers towards these options have been mentioned below:
- Lesser requirements: The FHA loans are guaranteed and backed by the federal government. This signifies that even if the borrower fails to repay the lent amount, the government will pay a portion of it to the lenders. This, in turn, involves lower risk in lending for the lenders, as a result of which, the requirements to be fulfilled by the borrowers in applying for the loan and getting it approved is comparatively much less.
- Credit history: In case of conventional loans for which the fund seekers apply, credit history of the applicant is of utmost importance. But in case of the FHA loans, the candidates having problems with their credit history can also apply conveniently. However, even if you have filed bankruptcy, you can easily qualify for these options because of its lower credit requirements.
- Reduced down payment: In case of conventional loans, around 20% of down payment is required to be paid on the home you are planning to buy. While, in case of FHA loans, only 3% of down payment is asked for, which makes it even more preferable among the borrowers.
- Costs: The closing cost of the housing loans is quite lower than that of the traditional bank loans. However, as far as the interest rates are concerned, it is competitively significant.
- Potential help: One of the most important features of the FHA finances is that the lenders will also provide you assistance in case you are struggling with the repayments that you have to make.
Along with the features of FHA loans, some of the plus points of the reverse equity mortgage schemes are as follows:
- For senior citizens: The reverse mortgage plans have been introduced only for the individuals who are 62 years old or more. This is to help them deal with the financial disturbances that they usually face after getting retired.
- Non-taxable: Enrollment to the reverse mortgage schemes will lead you towards an income in lieu of your own possession, which will not only be an addition to your pension, but will also be a completely tax-free earning during your retirement phase.
- No monthly installments: The senior citizens are not entitled to pay any monthly installment, while availing the facilities offered by reverse mortgage schemes.
