FHA Loans Are A Popular Choice

by : Matt D Murren

Sometimes, you are looking to purchase a new home or you need to improve the condition of your already existing home. Let me inform you that whether this home is new or used, whether it is a house, condo, manufactured, or mobile home, FHA loans are easy to obtain and are very affordable and accommodating to your needs. There are several reasons why you would opt for an FHA loan. We will discuss some of those reasons. First of all, qualifying for an FHA loan is easier. Mortgage companies are more apt to oblige your request of an FHA loan because they are guaranteed that they will get their money even if the borrower defaults on payment. FHA assures the lender of this. With these loans there are also smaller down payments, they offer loans with a 3% minimum down payment. You don’t even have to make the down payment yourself—it can be received as a gift from a charitable affiliation or from your employer. Also, FHA offers fixed rate loans in which your rate does hot go up at anytime during the period in which you are paying off your loan. They also offer an adjustable rate—these FHA loans offer a low rate and monthly payments at the beginning, but they may go up later on during the loan period.?

Sometimes during your loan payment period, you may encounter unfortunate circumstances in which you get very far behind on payments. This could throw you into a foreclosure situation. FHA has different programs that are especially designed for hardship cases. They offer a Moratorium in which the buyer doesn’t have to make a payment for so many months and the loan is extended for a few months at the end of the initial payoff date. They offer a Delinquent Payment Workout Agreement—a buyer’s past due amount is broken into smaller portions and added to the regular monthly payment for usually a two year period until the past payment is caught up to date and then the? regular payment amount resumes. Also with FHA loans other payment options are offered.

One very important factor to consider is that you don’t need the greatest credit to obtain an FHA loan. You could be eligible for the loan even if you have had a bankruptcy—although there is a two year waiting period before you can apply. A conventional loan is harder to get than an FHA loan because normally the interest rates are higher ad the required down payment is higher. Also, if you do happen to have bad credit, you are hot likely to be approved for a conventional loan. If you wish to finance a mobile home whether you are on private land or want to rent land in a trailer park, you can still qualify for FHA loans. One requirement for a mobile home, however, is that it must be placed on a permanent foundation. If you want to buy a house, but it needs a great deal of work to make it more inhabitable or to make it the home you want (maybe by adding on rooms etc.)—FHA will give you a loan which includes the cost of the home and the cost of the repairs or rehabilitation. FHA allows you in this way to go ahead and make your repairs and improvements and to pay it all back in one loan. FHA loans are very comparable to other types of loans.