FHA Mortgage Loan
A mortgage home loan that is insured by the Federal
Housing Administration (FHA), an agency of the federal
government, is named as FHA mortgage loan. The FHA actually
insures private loans that are issued for real estate buying
and renovation. Established in 1934 by the congress, the FHA
was made a part of the Department of Housing and Urban
Development's Office of Housing (HUD) in 1965. Today, the FHA
loan program is one of the most sought after options in
America.
The FHA mortgage loan is designed to help people from the
middle-income group to purchase real estate with a subsidized
loan rate. It is important to note that the Federal Housing
Administration does not give loans directly. Rather they
insure loans taken from private lenders. Hence in order to go
for an FHA mortgage loan you need to first check with
different mortgage brokers and lenders that whether they are
compatible with FHA loans. It is also advisable that you make
a comparative study of the rates offered by various lenders to
ensure the best deal.
There are several types of FHA loans available to choose
from. According to your financial status and need, you can
decide which one gives you the best money value. Following are
some of the FHA options -
- FHA Fixed Rate Mortgages
- FHA Adjustable
Mortgages
- FHA Energy Efficient Mortgages
- FHA
Graduate Payment Mortgages
- FHA Condominium Loans
- FHA
Growing Equity Mortgages
If you want to qualify for an FHA mortgage loan you need
to show that you are employed, that your job is stable and
reliable. It means that the FHA is easily accessible if you
are employed in a steady job for at least two years with the
same employer, and have been receiving a regular income.
Another major criterion is that your credit history should be
clear of any bankruptcy or foreclosure for the last three
years. The basis of eligibility is that you have to prove you
had been maintaining a good credit record for two years or
more.
Among the first time buyers, the most popular FHA
mortgage loan is the 203(b) FHA Fixed Rate Mortgage loan
program. Its popularity is due to the fact that your down
payment is kept to a minimum in this program. Even your
closing expenses can be decreased to a certain amount. Though
the 203(b) does not have a minimum income requirement to
qualify, yet you need to have some specific debt-to-income
ratio for the pre-approval of the loan. You can always find an
efficient financial advisor and get your debt-to-income ratio
calculated by discussing your current financial status.
Hence it is advisable to all potential homebuyers not to
make a major credit purchase just before applying for an FHA
mortgage loan. It can throw negative shades on your
debt-to-income ratio turning it against your FHA loan. Take
care not to fall short of payment to avoid foreclosure
threats. You can take the help of a housing counselor who can
guide you on how to sustain your FHA payments. Under certain
extraordinary circumstances, your FHA mortgage loan may be
protected from foreclosure for ninety days after the payment
due date.
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