What is an FHA Mortgage?
A mortgage through the FHA (Federal Housing Administration) is a loan designed for people with slightly lower credit scores and for those who do not have the full 5 - 20 percent down payment readily available as required by a conventional mortgage.
Down payments for an FHA mortgage are typically 3.5 percent. FHA mortgages do require mortgage insurance, which is standard on any mortgage that has less than a 20 percent down payment placed on the property. FHA mortgages are attractive due to the lower credit score requirements, lessened down payment requirement and the reduced closing costs associated with them. The FHA does not write the mortgages itself. The FHA provides the insurance that backs the mortgage, which is through a conventional lender who services FHA mortgages.
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