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The Benefits of FHA Loans
Federal Housing Administration (FHA) loans are becoming popular again. In these times of economic hardship, most homeowners and potential homebuyers are having a rough time trying to get loans from banks and lenders. For those who already have their loans, paying for high mortgage rates is the problem.
Conventional loans are hard to keep up with. Interest rates soar and affect mortgage payments. When this happens, homeowners are burdened with having to pay a lot for their mortgage. And with the still ailing economy responsible for the high unemployment rate, keeping up with mortgage payments is a challenge.
FHA loans, as you need to know, don't make or guarantee you loans. This works by insuring your home loan. It removes the risk from lenders so that they can be more lenient in approving you for loans.
This will allow lenders to approve home loans for people because they are spared from taking a loss whenever a homeowner defaults on a mortgage in the future. That simple.
Without further approval from FHA, its approved lenders are authorized to do the following: - Take loan applications - Process loan applications - Underwrite and close the loan
Why is there a need to switch to FHA loan? There are a lot of reasons, actually. Here are some of them:
1. You may qualify for an FHA loan even though you dont have a perfect credit score.
2. Those who have had bankruptcy or foreclosure can still take advantage of refinancing FHA home mortgage loan.
3. There is no minimum credit score requirement. Your credit history is evaluated specifically by your loan officer.
4. The US government insures lenders who make the FHA loan with competitive rates
5. Your mortgage payment can be as much as 65 percent of your gross monthly income.
6. Up to 97 percent of your homes value can be finance.
7. You can switch into a 30 year fixed loan easily by converting to an FHA refinance loan.
8. Switching from an adjustable rate mortgage to a fixed rate loan is made easy.
9. Refinancing your FHA home mortgage loan can allow you to consolidate first and second mortgages. 10. The closing costs are regulated by the FHA and are often lower than the cost associated with other lenders.
If you are a first time homebuyer or planning to refinance your home, the best choice is to go for FHA loans. Every one has a shot at being qualified. There are no borrowers restrictions with regard to income limits, affordable down payments, and relaxed underwriting standards.
About the Author Greg Shuey is part of a network called mortgage brokers utah. Together with Chase Gunderson, we specialize in FHA home loans and Utah FHA Streamline loans. We are here to educate and help you along the way when researching a utah streamline refinance.
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