FHA Home Loans

These days, we can never deny the fact that attaining property should be a top priority. Owning a home is usually the largest asset a person has. Since 1934, The US Department of Housing and Urban Development, and the FHA Home Loans it provides, has been helping people achieve ownership of their dream homes.

The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA Approved Lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934. They assist American citizens, with lower income, borrow money. These borrowers can purchase homes that they would otherwise not be able to afford.

For borrowers purchasing a home, good advice is to analyze your debt and income ratios. There are mortgage professionals that can assist you by counseling you in this regard. Further, you will learn what type of home you may purchase based on the analysis by the mortgage professional.

A “pre-approval” for a FHA Home Loan is a must before a borrower can start looking for a new home. To obtain peace of mind in this process it is always better to get a pre-approval. If you have good credit, it should be your ticket to shop for a house, but it is not always necessary. FHA Home Loans tend to be more lenient than other home loans in the market place when reviewing a person’s credit history. This allows more people with not-so-perfect credit get into a home of their dreams.

How to obtain FHA Home Loans

To make it clear, FHA does not make loans. There are agencies or banks that provide such loans services and are authorized by US Department of Housing and Urban Development. FHA insures loans for the borrowers through these agencies

The first step in obtaining FHA Home Loans is to ask if the mortgage professional is FHA approved. Also, get to know the rates and terms available and set aside time to do comparisons when shopping for FHA Home Loans.

Mortgage lenders assess the prospective buyer for any risks. This is accomplished by checking the debt and income ratio to determine the house that the borrower can afford to purchase. The low and moderate income earning families will greatly take advantage of this program as this can aid them to become homeowners in the future. For first time home buyers, the FHA allows them to put down as little about 3.5% and receive up to 6% towards closing costs. Also, borrowers can even use Mortgage Credit Certificate issued by certain states that allows a taxpayer to claim a tax credit for a portion of the mortgage interest that has been paid during the previous tax year.

The underwriting process of the FHA Home Loans definitely offers flexibility for the borrowers wanting to buy a home. This kind of mortgage program will look at the big picture of a borrower’s situation. The overall financial strengths and stability will most likely compensate for any minor weaknesses. This is a great program and should be considered for the many benefits it offers potential homeowners today. Call your local mortgage professional today to find out more.

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