FHA Mortgages have distinct advantages over other mortgages, especially if you want to put down less than 20% on a home.
An FHA Home Mortgage is a home loan granted to American citizens that is insured by the FHA (Federal Housing Administration), an agency of the federal government.
FHA insurance protects the lender by reducing the risk against potential loan defaults of the borrower. Since many first-time homebuyers have a limited credit history, banks might be fearful of lending tens of thousands of dollars to them. The FHA Home Mortgage program helps by guaranteeing repayment of the loan.
7 Important Facts
Here are 7 important facts about FHA mortgages by Marcie Geffner that everyone should know:
- Less than perfect credit is okay.
- Minimum down payment of 3.5%.
- Closing costs may be covered.
- Lender must be FHA-approved.
- Mortgage insurance is a must.
- Extra cash available for repair.
- Financial hardship relief allowed.
For more in-depth review of these important factors, read Ms. Geffner’s article in RISMEdia: 7 Crucial Facts about FHA Loans.