Five Reasons Why FHA Mortgages Are The Best Mortgages For Qualified Borrowers
08/17/2010 FHA mortgage loans are the best mortgage loans around if you're a first time homebuyer and you qualify. An FHA mortgage loan can finance a home purchase, or it can be used to refinance a current mortgage. We'll cover some of the benefits of FHA mortgages here.
Lowest mortgage rates. Because the government insures all FHA loans, lower rates are available to potential borrowers. This allows FHA lenders to provide loans to higher-risk applicants and individuals with lower credit scores. An applicant's credit score does not weigh as heavily in the lending decision as it would with a conventional mortgage.
Lower down payments. An FHA mortgage loan allows a borrower to purchase a home with just a minimal down payment. The minimum down payment for an FHA mortgage is 3.5%, which is very low compared to the typical 20% down payment desired by conventional lenders.
Preapproved mortgage insurance. With an FHA mortgage, the mortgage insurance is preapproved based upon the approval of the mortgage itself. Conventional mortgages don't function this way. With a conventional mortgage, you may be approved for one and not the other. In a sense, FHA mortgages come with insurance automatically.
Seller concessions. Many homebuyers are hit hard by closing costs, but this doesn't have to be the case when an FHA mortgage is involved. Seller contributions of up to 3% of the home value may be rolled into the loan amount, reducing or even eliminating the closing cost payment.
Easy refinancing. If you have an FHA mortgage currently, you can qualify for a streamlined FHA refinance loan. An FHA streamline refinance allows you to close a refinance with minimal effort. Many of the steps in the application process are waived in such a refinance program, allowing FHA borrowers to access capital easily and gain the best mortgage rates at any time.
With all these great perks, clearly FHA mortgage loans are the best mortgage loans available to qualified borrowers!
