FHA Mortgage Loans: The Doorway to Home OwnershipBuying a home is a big step and can feel overwhelming to those who are doing it for the first time. An FHA loan can help you to feel a little less stressed about the entire process by making the loan application and approval simple and worry free. In short, an FHA loan is one that the Federal Housing Administration has put their stamp of approval on. This makes a lender feel at ease about loaning the money because they know that the government has insured the payback of the money. It is because of this that they can give borrowers a better deal. There are a few restrictions when it comes to FHA loans however. In order to qualify for an FHA loan, the home must meet certain criteria: It must be an existing single family home, a condominium unit, fit only one to four families and if the home is a manufactured home, then it must be on a permanent foundation. Why Choose an FHA Loan? 1.Qualifications are simple! Since the loan is insured by the government, lenders are more likely to approve the loan. These types of loans are ideal for those home buyers who have married credit. It is also important to note that some first time home buyers, especially those with less than perfect credit, might have a hard time being approved for a conventional mortgage. An FHA loan makes this process much easier! 2.A Lower Down Payment. While some conventional mortgages will require up to a 20% down payment, the FHA loan only asks for 3% down. This makes saving and buying your first home much easier. Another difference between a conventional mortgage and an FHA mortgage is that the 3% down payment can be given to you by a friend or family member. This is not the case with a conventional mortgage. 3.Closing Costs are Cut Most of the time you can expect to pay significantly less in closing cost with an FHA loan than with a conventional loan. 4.Lower Interest Rates Lenders are often able to give buyers a lower interest rate because the Federal Housing Administration insures the repayment of the loan. This can save thousands of dollars over the life of the loan. 5.Foreclosure Options Financial hardships happen to all of us. An FHA loan takes this into consideration and provides several options for those who are in danger of losing their homes. FHA Loans will help you get into your first home with difficult to get mortgages such as California mortgages, Florida mortgages, New Jersey mortgages and Washington mortgages. Every borrower has different needs and different circumstances. An FHA loan may not be the best option for you so it is important to shop around and interview different lenders and different types of loans to find the perfect one to fit your needs. Since 1934, FHA loans have helped people to get into homes of their own, and there is a good chance that they will be able to help you as well. |
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