Most borrowers have heard of FHA home loans. They are very common. You
hear about them mostly as loans for first time borrowers, which is
common. However, most people don't realize that FHA loans can also be
does for refinancing. They are not only for purchasing a house.
HUD owns and operates FHA, which is a program designed to help
borrowers who might have difficulty buying a house. If the borrower
falls within FHA's requirements FHA insures the loan for the lender,
which makes the loan very low risk for the lender, which is very good
for the borrower. It could mean a lower interest rate, better terms and
just an overall better loan.
FHA's requirements are; a down payment of 3-5%, the home must be under
the FHA's set loan limit for the county that the borrower lives in and
a few other small requirements.
The main advantage to an FHA loan, is if you can fall within their
requirements, your credit history or income level, will not hold you
back from getting a home loan. If you are getting turned down from
other lenders because of a high debt to income ratio or because your
credit is bad. You may want to consider applying for an FHA loan, where
those requirements are either non-existant or much more flexible.
If the idea of down payment is holding you back, consider also, that
FHA loans allow the use of a non-profit organization as a source for
the down payment, which opens up the option of using down payment
assistance programs like Neighborhood Gold.
To view our list of recommended mortgage lenders online, who offer FHA
programs, visit this page: http://www.abcloanguide.com/govloans.shtml
