FHA Mortgage Insurance
FHA mortgage insurance protects lenders in case of a default by the borrower of the FHA loan. An FHA mortgage helps reduce the cash needed to purchase a home. The FHA is funded solely from the income it creates: from the revenue generated by FHA mortgage insurance. This FHA mortgage insurance cost is borne by the homebuyer, but it ends approximately five years later or when the FHA mortgage balance is seventy-eight percent of the property value, whichever occurs last. FHA mortgages have flexible payment schedules and more inclusive definitions of monthly income, allowing more borrowers to thus qualify for an FHA loan. Ask your lender to do a side-by-side comparison between the FHA mortgage and the current non-FHA versions. It will soon become apparent which is the best value for your money, especially if you don't have a lot to invest in a down payment.