Why FHA Mortgage Loans Are Such A Good Deal
FHA mortgage loans are part of a nationwide lending program that allows Americans who may not qualify for a conventional mortgage to purchase a home. The Federal Housing Administration, more often known as FHA, is run by the United States Department of Housing and Urban Development (HUD).
An FHA mortgage is an attractive proposition for anyone who qualifies for the opportunity to make a lower down payment and to pay reduced closing costs, when purchasing a home. These are just part of the deal you get with an FHA mortgage. There are plenty more reasons for wanting to know more about FHA mortgage loans and who qualifies for them.
What Is An FHA Mortgage?
FHA will not offer you with a mortgage loan, it only provides mortgage insurance for a loan you get from a mortgage lender who is FHA approved. This government-backed insurance is guaranteed to protect a lender against any default by homeowners. Under the terms of FHA insurance, any FHA approved mortgage lender can make a claim against any loss incurred through default of loan repayments.
This US government scheme does not cost American taxpayers any money. All insurance moneys collected through the scheme are kept in a single operating account.
FHA provides different types of mortgage insurance, according to need, and offers a range of insurance for first-time homebuyers, for multifamily homes, for refinancing and for other types of mortgage.
Who Qualifies For An FHA Mortgage?
An FHA mortgage is designed to help anyone who has been earning a regular wage for at least twelve months to become a homeowner.
Part time employees can also qualify if they have been in the same employment for at least two years.
Income from child support, alimony, disability allowances, pensions or dividends are also acceptable as evidence of regular income.
Self-employed people qualify if they can show at least a full two years income through their previous tax returns.
People in the low to middle income bracket qualify for FHA mortgage loans when they have a reasonably good credit rating, but someone who has never used a credit card or previously taken out a loan will be accepted without having a credit score.
To qualify for FHA mortgages, it is necessary to provide some payment history and evidence of paying rent for the previous twelve months, plus household bills and other regular payments such as car...