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What_Is_An_Fha_Mortgage_Loan_ by paydot888

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									What Is An Fha Mortgage Loan?

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513

Summary:
The Federal Housing Administration (FHA) is operated by the Department of
Housing and Urban Development (HUD). The FHA has the responsibility of
administering the government insured home loan programs. Like a VA loan,
the FHA does not actually lend the money for the home to the borrower but
instead insures the loan so that more lenders will be willing to take on
the risks of granting the loan to a first time home buyer.

There are many different FHA home loan programs avail...


Keywords:
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consolidation


Article Body:
The Federal Housing Administration (FHA) is operated by the Department of
Housing and Urban Development (HUD). The FHA has the responsibility of
administering the government insured home loan programs. Like a VA loan,
the FHA does not actually lend the money for the home to the borrower but
instead insures the loan so that more lenders will be willing to take on
the risks of granting the loan to a first time home buyer.

There are many different FHA home loan programs available. One of the
most popular is the 203(b) home loan. This particular program is a fixed
rate loan for owner-occupied homes and only requires a minimum of 3% down
from the borrower. In addition, this particular loan program allows the
use of 100% of the closing money to be a gift from a government agency,
family member, or non-profit organization.

Overall, the benefits to using an FHA home loan are that the credit
requirements for a first-time buyer are less than what might be needed
for traditional type loans. In other words, a person or family with some
minor credit problems in the past would find it easier to get a home loan
through an FHA home loan program than if they tried to go it alone.

FHA home loans are assumable, which allows the buyer to take over a
previous mortgage without the additional cost of obtaining a fresh, new
loan. Another important factor is that the seller or lender must pay for
part of the closing costs (called non-allowable costs) while the buyer's
allowable costs can be infused, in part, into the loan.

Most, if not all, mortgages require monthly mortgage insurance but the
monthly mortgage insurance premium for an FHA loan is less expensive than
what is commonly found in traditional loans. An FHA loan also allows for
a higher debt ratio than most traditional loans. Individuals and families
who earn a lower income will find this an important factor when shopping
for a home loan.

While there are many programs available through the FHA for the first-
time buyer, there are also programs for those who have purchased homes in
the past. There are also some refinance programs available.

Home shoppers should be aware, however, that the FHA will limit the loan
size according to the area of the country in which you live or wish to
purchase the home. You should visit the FHA website to learn what the cap
is for your particular area, as well as to learn of any other
restrictions that may apply to you.

The official website is also a great place to learn more about some of
the other programs that are available. Some of the more commonly used
programs include:

Standard fixed rate (FHA 203b)
Rehab Loan (FHA 203k)
Condominium Loans (FHA 234c)
FHA adjustable rate mortgage (FHA 251)
FHA Hybrid Adjustable Rate Loans
FHA 2-1 Buy Down
Energy Efficient Mortgage Programs
Reverse Mortgages for senior citizens

All of these FHA mortgage loan programs can help new or existing home
owners to get good deals with lenders. They are certainly worth looking
into.

								
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