FHA Mortgage Benefits

Posted on October 21, 2008 by admin 
Filed under Published Articles · Tagged: , ,

FHA insures home mortgage loans that enable low and middle income borrowers to finance or refinance homes in America.  FHA loans provide government assistance so Americans can purchase properties and become homeowners. Typically FHA home mortgages provide low rate, reduced lending costs and only 3% is required for the down-payment in most cases.

FHA offers mortgage insurance but they do not make home mortgages. However, the FHA home loan program often minimizes the cost of a home financing and there are no penalties for refinancing or early pay-off.  In addition, FHA encourages lending companies to finance loans for borrowers with all types of credit.  With FHA’s Section 203(b) program, a homebuyer can purchase a new or used 1-4 family home. FHA home-buyers must occupy the home.

A FHA mortgage enables borrowers with poor credit scores to qualify for the reduced rate loans, rather than taking the higher adjustable rate loan offered by sub-prime lenders. This can save thousands in interest charges.  Required down payments are also smaller. Instead of the typical 10% down, a buyer can put down as little as 3%. The closing costs can also be financed with the mortgage, lowering the initial costs of purchasing a home.

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