What is a FHA Mortgage?Aug 20 2012
By: Nicole Gates
This mortgage option is run by the Federal Housing Administration (FHA) to make it easier for home buyers to qualify for a loan, whether it's a purchase or refinance. That means, you'll be able to qualify with a smaller down payment (as low as 3.5%) and less-than-perfect credit score!
What's So Great About FHA Loans?
• You can buy a home with a down payment as small as 3.5%, a much lower down payment than conventional loans offer.
• You can use gifts for down payments and closing costs.
• There are no prepayment penalties (this is big for subprime borrowers).
• Your FHA mortgage may be allowed to be taken over by another person if you choose.
• You may receive leniency if you stumble across hard financial times while paying your mortgage.
• You can fund for home improvements with a FHA 203K program.
Why Shouldn't I Get a FHA Loan?
• There are limits to how much you can borrow with FHA mortgages, so you may not get all the money you need if you're looking to get a large loan.
• The upfront mortgage insurance premium may cost more than private mortgage insurance.
Click here to see if you qualify for a FHA mortgage, or contact one of our expert FHA loan officers!