What is a FHA loan?
FHA loans are designed to make housing more affordable for first-time homebuyers and those with low to moderate income. Both fixed- and adjustable-rate FHA loans are available, and in most states, an FHA loan can be used for refinancing. The difference is, they’re insured by the U.S. Department of Housing and Urban Development (HUD). With FHA Insurance, eligible buyers can put down as little as 3% of the FHA appraisal value or the purchase price, whichever is lower. Qualifying standards are not as strict and the rates are slightly better than with conventional loans. back to top Convertible ARMs Some adjustable-rate mortgages allow you to convert to a fixed rate at certain specified times. This mitigates some of the risk of fluctuating interest rates, but there will be a substantial fee to do it. And your new fixed rate may be higher than the going fixed rate. Two-Step Mortgages This is an ARM that only adjusts once at five or seven years, then remains fixed for the duration of the loa
An FHA loan is a mortgage loan that is insured by the U.S. Federal Housing Administration to help those who are buying homes for the first time or are in other special circumstances. An FHA loan offers a number of benefits over existing loans and are especially attractive to first-time home buyers or buyers with lower incomes. The program is administered by the federal government and has been in existence since 1932. The FHA loan program is designed for a number of different situations. Its primary purpose is to help individuals purchase first homes, but that is not the only reason. FHA loans can also be used by those who wish to repair homes. The cost of acquisition and the cost of the repairs can all be put into one FHA loan, making the entire financing very convenient. Seniors can also benefit from an FHA loan, as there are special programs for them as well. The FHA loan program can be a good choice for many, despite what the economy may be doing. In some cases, even when there is a
FHA loans are insured by the Federal Housing Administration and designed to make homeownership affordable especially for first-time home buyers. A FHA mortgage is actually available through many of the same banks or lending institutions you would normally work with because FHA doesn’t actually make the loan. Instead, FHA insures the loans made by other lenders when a home buyer wouldn’t otherwise qualify for a conventional mortgage. Benefits of FHA loans include: • No PMI or private mortgage insurance • Low down payment • Favorable fates and terms especially for first-time home buyersMore Real Estate Tips.
