One of the more significant benefits of buying a home with an FHA loan in today’s real estate market is the incredibly low prices for which many homes are now selling. It isn’t hard to find houses in the Phoenix metro and other areas of Arizona that were previously selling for $400,000 – $500,000, now priced at $300,000 and under. With homes prices being offered at such low costs, it could potentially be more expensive to rent than to buy.

Renting may seem like the only viable choice you have when it comes to your living arrangements, but that might not be your sole option anymore. With homes priced so low in Arizona’s current real estate market, the dream of buying your own home could come true more quickly than you realize. Buying your own home can help you build equity, increase your credit score, and acquire better financial standing overall. Renting does not allow you to build any type of equity to your name and may do substantially less to help your credit score and financial standing than buying can. Banks and other financial officials often view homeowners as being more financially stable and responsible than those who rent and have never owned their own property. If you want to be recognized by your potential lenders as a responsible and stable person, worthy to be offered other loans and incentives for the things you need, you should consider buying now while the real estate market continues to favor new buyers.

Rental payments are usually more expensive than regular mortgage payments unless you sacrifice quality for quantity. For example, in today’s market you may be able to find a beautiful, four-bedroom, three-bath home to buy that, on average, may require $1,000 rent each month for the mortgage. In order to only pay $1,000 per month for a rental property however, you would likely have to sacrifice one or more of the bedrooms, as well as one of the bathrooms in the home. Renting a four-bedroom, three-bath home, would likely increase your payments to $1,500 per month. When you pay rent, you pay the mortgage and accumulating interest, just as you would a home you bought yourself. But when renting, you also pay additional funds each month to give your landlord incentive to keep renting. Buying a home entails repaying your lender with an accumulated interest; renting a home also requires that, plus some extra for your landlord. Is it really worth it to pay extra for a rental property when you won’t even be able to claim it as your own once the mortgage has been entirely paid? Will you even know when that happens? Likely not, because you will always be paying payments to your landlord, regardless of whether any of that amount is being paid toward the mortgage.

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The benefits of buying a home are substantial, the first of which is that the home becomes yours. When renting a house, you may feel cozy and at home while you’re living there, but once your lease is up for good, you have virtually nothing to show for the time you spent there. You pay the monthly mortgage payments and care for the home, but all the while you recognize that it’s not your home in the long run. You acquire no equity in a rental property, and you therefore do not exhibit any ownership over it other than the fact that it is a place in which you dwelt for a time. Owning a home changes all that. Although you are paying monthly payments, just as you did in your rental property, these monthly payments are going towards your ownership over your property. And unlike a rental property, at a future date and time you will no longer have a monthly mortgage payment to worry about in your own home.

Another benefit of buying your own home with an FHA loan is that it could be less expensive in both the short-term and the long-term to buy, rather than rent. If you buy a three-bedroom, two-bathroom home in the same neighborhood in which you were previously renting one of equal size and value, you will almost certainly pay less in the monthly mortgage payments. This is because rental properties are used by real estate investors as an investment property. They will not simply charge you the amount due by them every month for the mortgage payment. Rather, you will be paying above and beyond the mortgage payment to a certain extent each month so that your landlord can acquire a profit from his or her rental property. This means that despite closing costs and down payments that are required with the purchase of a home, you may still be saving money in both the short-run and the long-run by buying instead of renting.

Your home can truly be all yours with no strings attached once you’ve paid off your mortgage. You may discover that owning your own home and accumulating equity in it is one of the best decisions you’ll ever make in your lifetime.  But home ownership is an incredible investment that you may not only be making for yourself; you could potentially pass your home on to your children and even your grandchildren, spanning much farther than your own lifetime to help your posterity for many generations to come.

Joel McLaughlin

Serving major cities including: Scottsdale, Glendale, Mesa, Tempe, Phoenix & More

FHA loans are not provided by the government, but rather are insured by the government. The FHA guarantees that a home mortgage loan won’t default if the borrower is unable to continue making payments. This insurance dramatically reduces the risk that lenders face when advancing a mortgage loan. Because of this reason and others, the down payment on an FHA loan requires a certain percentage of your total loan down. Typical mortgage loans can require up to 20% down, but with FHA there is some leniancy, you should contact a loan specialist to find out the exact amount required as a down payment. The great news is that right now several large benefits are offered by the government to make it easier to get in to a home! When you’re buying a home for potentially hundreds of thousands of dollars, you can experience major savings financing with an FHA mortgage loan.

One of the most common reasons why so many people are unable to become homebuyers has to do with their credit score. Virtually every traditional mortgage loan requires that a potential homeowner have a decent credit score before they can qualify to buy a house. This makes sense, of course, but it can be very discouraging for those who, though they’ve been through rough water financially, are working to create a better credit score. This process can take time, and being unable to finance a home for your family and to help your credit score rise further can be frustrating. Luckily, with an FHA loan, your credit score doesn’t have to be perfect. In fact, most of the time there are no credit requirements at all to consider in qualifying for an FHA loan.

Although there are typically no credit score requirements to consider when applying for an FHA loan, there is still the typically debt-to-income ratio to consider. Although having proportionately balanced levels of debt and income is ideal when qualifying for any type of financing, FHA loans are more relaxed in debt-to-income ratio requirements than regular mortgage loans. So although the ratio is still important, again, you don’t have to have perfect financial standing in order to finance using an Arizona FHA loan.

If you already own a home and would like to experience the benefits that have just been described, it isn’t difficult to refinance with an FHA mortgage loan. It is even possible in certain cases to refinance two separate mortgage loans into one FHA mortgage loan. Since these loans are regulated by a government agency, it’s only possible to finance with one of these loans at a time. For secondary residences and such, you will either have to go with a traditional mortgage loan or an investment loan.

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