Same as any other type of residential mortgage loan, but one major difference is insured by the federal government, through the Federal Housing Administration (FHA)
There is a monthly mortgage insurance premium (MIP) which varies based on loan amount and regardless of the amortization term or LTV ratio, unlike auto insurance or hazard insurance, where insurance premiums benefit you, but FHA loan mortgage insurance premiums (MIP) is benefit your lender. In any event you default, your lender gets paid.
FHA loans include purchase loans, home construction loans, and streamlined refinance loans insured by the Federal Housing Administration (FHA), which is created by National Housing Act of 1934. This agency is part of the Department of Housing and Urban Development (HUD), it insures all type of loans which meet its minimum standard FHA requirements.
FHA mainly helps people who cannot afford a conventional down payment or does not qualify for Private Mortgage Insurance (PMI). Considering a FHA home loan, you probably have many questions about how the program works for you and how to get approved. An FHA Loan mortgage program isn’t suitable for everyone. But it does benefit some advantages for certain types of borrowers.
Whether you apply for a conventional or an FHA loan, you will apply through a mortgage lender and meet the lender’s minimum guidelines for approval and have to clear the underwriting process.
Bottom line: The only way to find out if you are qualified for an FHA loan is to apply for one.
To learn more about FHA Home Loan, please contact us at 1-855-901-8633 (Toll Free)
Our professional team of loan mortgage consultants are ready to assist you. They can help you navigate the loans you can choose from, calculate the benefit, and help you understand the features. They can also assist with making the application process straightforward and will keep you updated so you know what is happening.