QandAs: Loans

What are the benefits of an FHA mortgage?

Answer:
It's important to understand the FHA does not make mortgages.

Instead, they insure mortgages for individuals who meet specific income requirements. There are many benefits of Federal Housing Administration (FHA) insured mortgage loans. Many individuals who meet FHA requirements are able to qualify for low interest rate fixed rate loans would not meet the more stringent income restrictions necessary to qualify for a similar conventional mortgage loan.

Individuals who qualify for FHA loans often don't have make as high of a down payment as is required with other types of mortgage loans. With an FHA mortgage loan, buyers are required to make a three percent down payment on their loan. Conventional mortgages can require down payments of as much as ten percent. FHA mortgagees can also save money on fees associated with buying a home, as the agency places a one percent cap on mortgage origination fees.

Without the FHA mortgage program, many low to moderate income families would not be able to afford home ownership. In order to qualify for an FHA loan, you must meet the program's income and debt ratio requirements and have a good credit record. The home being financed must be your primary residence, and you must be qualify for financing through and FHA approved lender.


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	What is a Federal Housing Administration or FHA Mortgage? What are the cons of an FHA mortgage? What are the different types of Mortgages?