How Soon Can I Sell My House After Purchasing with an FHA Loan?
Buying a house is a significant investment, and it is essential to understand the terms of your mortgage before making any decisions. If you have purchased a house with an FHA loan, you may be wondering how soon you can sell it. In this article, we will explore the benefits of an FHA loan and the guidelines for selling your house.
Benefits of an FHA Loan
An FHA loan is a mortgage that is insured by the Federal Housing Administration. This type of loan is popular among first-time homebuyers because it requires a lower down payment and has more relaxed credit score requirements than conventional loans. Here are some of the benefits of an FHA loan:
Lower Down Payment: An FHA loan requires a minimum down payment of 3.5% of the purchase price, which is significantly lower than the 20% required for a conventional loan.
Lower Credit Score Requirements: FHA loans are more forgiving when it comes to credit scores. Borrowers with a credit score of 580 or higher can qualify for an FHA loan with a 3.5% down payment. Borrowers with a credit score between 500 and 579 can still qualify, but they will need to put down at least 10%.
Assumable: FHA loans are assumable, which means that if you sell your house, the buyer can take over your mortgage at the same interest rate.
Guidelines for Selling Your House
If you have purchased a house with an FHA loan and are considering selling it, there are some guidelines you need to follow. Here are the key points to keep in mind:
Seasoning Period: The FHA requires a seasoning period of at least 90 days before you can sell your house. This means that you must own the property for at least 90 days before you can put it on the market.
Appraisal: When you sell your house, the buyer will need to get an appraisal. The FHA requires that the appraisal be done by an FHA-approved appraiser.
Payoff: When you sell your house, you will need to pay off your FHA loan in full. This means that you will need to have enough equity in your home to cover the outstanding balance of your mortgage.
Prepayment Penalty: There is no prepayment penalty for FHA loans. This means that you can sell your house at any time without incurring any fees.
Conclusion
In conclusion, if you have purchased a house with an FHA loan, you can sell it after a seasoning period of at least 90 days. The benefits of an FHA loan include a lower down payment and more relaxed credit score requirements. When selling your house, you will need to get an appraisal and pay off your FHA loan in full. There is no prepayment penalty for FHA loans, so you can sell your house at any time without incurring any fees. If you are considering selling your house, it is essential to work with a real estate agent who has experience with FHA loans to ensure that you follow all the guidelines.