FHA Government loans - Are they for me?
[ December 12, 2008 ]


We get a lot of questions from borrowers about FHA Loans.  One of the most common questions is whether or not an FHA Government Loan is right for me?

 

While there is clearly no “one size fits all” answer, for the vast majority of borrowers, the answer is YES.

 

FHA Government Loans are insured by the Federal Housing Administration.  As such, they are backed by the full strength of the US Government.  That’s especially important in today’s shaky credit market where banks are afraid to lend because of mounting sub prime mortgage and adjustable rate mortgage (ARM) losses.

 

Simply put, banks have tightened lending criteria so severely that only a small percentage of borrowers qualify without some sort of FHA government loan or private mortgage insurance guarantee against future mortgage losses.

 

With the world economy in a downward tailspin, it doesn’t appear that banks are going to loosen up mortgage lending criteria any time soon. 

That’s where FHA government loans come to the rescue.  With the US Government insuring FHA loans, banks are much more willing to lend.  It’s a win/win situation… banks lend the money, consumers are able to qualify for mortgage loans that might not otherwise be available and the US Government insures the lender against loss.

 

Here’s what you get with FHA Government Loans:

 

1) Less money down to purchase a home.


2) Refinance a higher percentage of your home’s value with FHA Government Loans.  Refinance up to 97% of your home’s value or cash out up to 95% of the value.


3) FHA loans are not heavily dependent on a borrower’s credit score like conventional mortgage loans.  That means more people qualify.


4) FHA gov’t loans are available to people with lower incomes.


5) Generally, interest rates are lower on FHA loans because the lender is accepting less risk for the loan.

 

So, if you are considering a mortgage, either to buy a new home or to refinance an existing mortgage, we recommend you check out FHA government loans to see if they might be right for you.

 

Get more information here:  FHA Government Loans


 


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