Are you wondering what is a FHA loan? Zero in on what this mortgage is and how it is the best choice for those looking for financing below.
This question is asked by many people and it is a good one. First and foremost you need to know that FHA or the Federal Housing Authority has been helping people buy homes since 1934.
actually part of HUD or the US Department of Housing and Urban
Development which is a government run organization. They do not lend
the money but insure your mortgage to the lender.
That's term in a nutshell. But let's learn more about this product.
To put it in terms you might understand today, it's kind of like a government bailout program. In other words, the government says to your lender, if the borrower does not pay the loan and defaults, we guarantee the lender to get their money.
With this type of a loan program, the lender can offer you 3 main benefits for using the FHA home loans.
So once again, what is a FHA loan? It is a loan you can obtain from many different lenders that you can use to buy your first home. It can also be used for those who have had a home in the past. You just cannot have more than one FHA loan at a time.
It allows us to put a low down payment of just 3.5% of the purchase price. Many of the mortgage closing costs and other fees can be included in the loan. Furthermore, you can buy anything from a single unit up to four units. So if you qualify, you could buy a four unit apartment and have the other 3 tenants make your payment for you!
What if you want to buy a home that needs fixing up? Again, FHA offers a way you can buy the home and finance the repairs. In fact, even if you already own a home and want to remodel it, you can refinance the home with a FHA loan and add the cost of certain repairs into the loan.
One last thought in answer to the question what is a FHA loan. FHA also will finance manufactured housing and mobile homes. There are two loan programs where you can buy a home that sits on land or even if it's in a mobile home park.
In summary, the FHA loan is indeed a great
program for people who are first time home buyers, those who may not
have much money for the down payment or even have perfect credit.
Want to learn more about FHA home loans. This page breaks down the various FHA products so you can find the program that fits your needs the best.
Perhaps you have heard about zero down loans. Zero Down Home Loans explains this kind of product and how you can find one.
Do you have more questions? Have a Question is a great place to see what others have asked previously or to ask the expert yourself. Go ahead....pick my brain!
Go to House Buyer Solutions Home Page.
Oct 08, 19 08:33 AM
Hello, I have a question regarding USDA vs. FHA home loans. I am in the process of getting a home in the next month but was told I wouldn't be approved
Aug 05, 19 10:44 PM
Hi Help please! I am a first time home buyer, buying a home with my fiance'. He is selling his home currently on the market for $125K with no contingencies.
Apr 15, 19 12:36 PM
When buying a home out of state, should we wait for employment contracts? Or can we use our current state's bank? Find the answers here.
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