What is a FHA loan?
Most of us need to borrow some money at least at one point of time in our life. When we want to buy a car, to study at the College or University, when we want to buy a house or home, when we need money to start our own business – even when we use our credit cards. There are many types of loans and mortgages, such as FHA loans, Student loans, College loans, Business loans, Personal loans, Commercial loans, Payday loans, Auto loans, Car loans, Vehicle loans, Mobile home loans, Motorcycle loans, Military loans, Construction loans, Home loans, house loans, home equity loans, Bridge loans, Disaster loans, farm operating loans, Agriculture loans, Debt consolidation loans, Direct Loans, Government loans, Unsecured loans, refinance/remortgage loans, Bad credit loans, etc., just to name a few. Within each loan term there are additional sub terms such as Fixed rate vs. Variable rate, Adjustable rate, ARM, PITI, HELOC, Balloon Mortgage, reverse mortgage, and other bewildering financial terms we w
A loan insured by the Federal Housing Administration (FHA), open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderately priced homes almost anywhere in the country. You can put down a smaller down payment on a FHA loan, but you will also be required to pay mortgage insurance. The Federal Housing Administration (FHA) operates several low down-payment mortgage insurance programs that homebuyers can use to purchase a home with a down payment of 3 percent or less of the cost of the home. The most commonly used FHA program is the 203(b) program which provides for down payment assistance on one- to four-family homes.
FHA MORTGAGE Insured by the Department of Housing and Urban Development, this mortgage is attractive because of the 3% down payment requirement. Allowable closing cost can be financed, seller can contribute up to 6% of the purchase price, and gifts for down payment and closing costs are allowed. Lower credit scores, bruised credit, and higher ratios are generally allowed. You can get up to 85% of appraised value on a refinance. (FHA loan limits apply per state and county) 203K FHA MORTGAGE Basically the same guidelines as above except this loan offers the combination of the purchase price plus the cost of improvements all in one loan. The total improvements must be a minimum of $5000. Typical allowable improvements are; kitchens, bathrooms, roofs, windows, heating systems, and plumbing. Luxury items, such as swimming pools, are not acceptable.
