FHA Loans are making a Comeback

With the housing market down as it is, it is getting increasingly hard to find affordable home loans. Most lenders are wary of loaning out money after the subprime crisis caused millions of foreclosures in the US. This means that even if you have decent credit scores, you may have to pay a huge down payment on the house plus private mortgage insurance (PMI). Because of this, we have seen a comeback of FHA Loans as of late.

What is an FHA Loan?

The FHA does not actually issue money for loans. What the FHA does is insure a portion of the loan in the event of a default on the loan resulting in foreclosure. This basically protects your lender, making you a much more secure and attractive borrower. This means that you will be able to take advantage of some great benefits that you would not find with a conventional loan.

What are the benefits?

The biggest benefit of an FHA Loan is the low down payment feature. Conventional loans can require upwards of 20% for a down payment, whereas the FHA frequently issues loans with as little as 3.5% down. Additionally, you won’t be required to pay for private mortgage insurance (PMI) because the Federal Government insures the loan for you. Plus, as such a secure and attractive borrower, you will be able to take advantage of competitive interest rates.

There are many different types of FHA mortgages available, so be sure to check out the website for the US Department of Housing and Urban Development (HUD) to find a plan that’s right for you.

How do I qualify?

In order to qualify for an FHA Loan you will still need to supply your credit scores, debt-to-income ratio and bank balances. However, the FHA is much more lenient in regards to your financial history. Even if you have had a blip in your score, you should still look into applying for the loan.

How do I get pre-approved?

You can get pre-approved today by filling out our 1 minute FHA Loan form. The process is simple, fast and 100% free with no obligation. We have a team of FHA specialists who are here to help you start on the road to homeownership today!

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