What is a FHA Mortgage?

Mortgage and Lending with Guaranteed Rate Inc. - NMLS #2611 NMLS #370763

A FHA mortgage is a home loan that requires a small down payment. The Federal Housing Administration (FHA) runs several programs that make it easier for home buyers to qualify for a mortgage loan. The FHA does this by promising the lender to pay for the mortgage if the borrower should default.

A FHA loan can require a down payment as low as 3.5%. It also makes it easier for you to use gifts towards your down payment or your closing costs. There are a few other perks towards a FHA mortgage, including leniency during hard financial times or funding for home improvement, but all these possibilities should be discussed with your loan officer.

To qualify, you’d need a reasonable debt-to-income ratio and a decent credit. Most conventional loans require good credit, so this condition is a plus for home buyers who don’t have the best credit to be eligible for a conventional loan.

However, a FHA loan isn’t the best loan for every home buyer. While there are no income limits to qualify for a FHA mortgage, the FHA does limit how much you can borrow. So if you’re looking to borrow a large amount of money for your home, you may want to try a different loan option. Also, the FHA charges the borrower a fee in order to promise the lender that they’ll cover the loan if the borrower defaults, and this upfront fee (and the ongoing premiums) can end up being costly.

When it comes to all your mortgage decisions, make sure you talk to your loan officer, Michal Bander about all the best options for you.

Posted by



Michal Bander
Vice President of Mortgage Lending


P: (954) 684-9227
F: (954) 867-5123

NMLS ID: 370763


4400 N. Federal Hwy. Ste 150 • Boca Raton, FL • 33431

NMLS ID 2611
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Comments (3)

Bud & Beth McKinney
Cary/Raleigh/Apex NC - The Team That Cares, RE/MAX United

Good explanation.   First time buyers need to grasp this.

Jan 04, 2012 11:12 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

So many folks see FHA mortgage products as only for first time home buyers, which you know is not accurate at all. Great product for some many people.

Jan 04, 2012 11:48 PM
Michele Cadogan 917-861-9166
Fillmore Real Estate 2990 Av U, Bklyn , NY 11229 - Brooklyn, NY
Licensed Real Estate Associate Broker -


Thanks for sharing is  easy to follow explanation of the FHA loan.  Have a great day.. 

Jan 05, 2012 02:57 AM