April 4, 2015
If you are getting ready to start house hunting and want to buy a dream home with an FHA mortgage, there are a few things to think about as you get ready to start the search for your new house.
One very important thing to do is to remember to save up some money for a home inspection.
It’s easy to confuse an FHA appraisal, which basically sets the fair market value for the home and insures the property lives up to minimum standards, for a “clean bill of health” for the home. But make no mistake, the FHA does NOT guarantee the home is defect-free even if it DOES pass the appraisal with no corrections.
The borrower pays for this optional, but critical service and it’s one that can save you thousands of dollars later. Don’t purchase a home without getting a home inspection performed by a professional.
Another thing to think about when house hunting is the amount of down payment you plan on making. You could pay the minimum 3.5%, but paying more up front can help shave costs off the loan over its full term–don’t underestimate the power of a larger down payment to save you money in the grand scheme of things. Sometimes paying more up front can help you later down the line.
Do you know if the area you are house hunting in is prone to certain types of natural disasters? Mudslides, forest fires, flood zones, and places that could be considered a “tornado alley” can all be concerns–especially if you need to budget for flood insurance or other natural disaster insurance.
Being aware of the natural disaster issue can help you make a much more well-informed choice when deciding on a home. Do your homework in the area where you want to live and find out what you could expect when living there. Sometimes knowing is half the battle.
There are plenty of other issues to consider, which is why the FHA encourages borrowers to get pre-purchase counseling from an FHA/HUD approved housing counselor before you buy. You can get a referral to one in your area by calling the FHA’s hotline at 1-800 CALL FHA.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: