All About FHA Loans

FHA has been around since 1934. FHA stands for federal housing administration. This company strives every day to help people get the home they want. Most people get the company confused in thinking that they offer loans but they do not do this.

What they do is make sure to insure a loan so that creditors can be able to offer mortgage assistance to people that have fair to poor credit ratings, have a low down payment at of three percent, people who have filed bankruptcy in the past or individuals who have had their home foreclosed on.

Basically, the government will insure loans for FHA approved creditors so that the owners decrease their risk of any form of cost if they loan to debtors who could possibly fail to pay on the mortgage payment. Being that the company has been in business for numerous of years they strive to help by encouraging the housing market make loans affordable and accessible for each individual that applies with the company.

The People That FHA Has Helped

  • The families of the military who have returned from being in a war.

  • The elderly people that are over the age of sixty.

  • People who have low incomes.

The company has helped those individuals along with a lot of others who have needed it in the past and the present days. Anybody can get a loan from FHA it isn’t just for the people who buy a home for the first time. The reason most people turn to this company is because it is the easiest and simplest form of a real estate mortgage loan to be able to qualify for.

The only requirement to start off with is being able to make a low down payment and in order to do that you do not even have to have perfect credit. The company is able to work with anyone no matter what their credit score is.

The fact that the company will insure the mortgage for you the creditors are more agreeable to provide you with a loan. Another benefit of an loan with the company is it is assumable this means if for any reason you wish to sell your house the consumer can take over the loan you already have if they want. The FHA loans can also be used for refinancing as well not just purchasing a home. Before you decide to go with a FHA loan you will need to know what all it takes to qualify. Here are a few things you should be familiar with

You Have To Meet the Requirements

  • You must have worked for the same employer for at least two years or more.

  • You have to have a social security number that is valid. You need to be a legal age to sign for a mortgage and be a resident of the United States.

  • It is a requirement to make the minimum payment upfront of 3.5 percent on the home.

  • An appraiser from the FHA Company has to appraise the property and approve it.

  • The mortgage payment will need to be less than thirty one percent of your grossly month income, this will include the property taxes, property insurance, the principal and the interest.

  • Your debt each month can’t be no more than forty three percent of your normal income per month, this includes things like your vehicle, credit cards, mortgage and student loans.

  • Your credit score is not required but if you have in the past been late on several payments then they could check further into that.

  • If you filed bankruptcy in the past then you have to be two years out and have good credit.

  • If your home has been foreclosed on then you will need to have been out for at least three years and have an outstanding with good credit.

As mentioned above FHA is not only for people who want to use it as a first time buyer you can also get a loan with them for fixing up your home. For instance if you want to add an additional room or do some repair, FHA even has a loan called energy efficient mortgage for those that want to make improvements on their home to save energy on their electric bill.

FHA also has two other kinds of loans for the people who want a mobile home or a manufactured home. One of the loans is for people who own the land they wish their home to be moved onto and the other loan is for when the mobile home is relocated to a park that is just for those types of homes.

Another thing with the FHA Company is once you apply for a loan and are approved you have to have mortgage insurance. This is a form of policy that will protect the creditors against any kinds of loss that may result when the individual is unable to pay on their home mortgage.

This is a requirement that will include mortgage insurance mainly for mortgagors who make a down payment that is the lesser amount of twenty percent. With all the different options a person has with FHA when it comes to loans you should be able to find one that you will be comfortable with and one that will help you with getting your new home or improving the home you have now. 


Sign in to comment