FHA Facts

March 22, 2010 | 2 Comments

This article is from Travis Federal’s brochure that comes out every few months. I thought it did a great job explaining FHA financing. Here are some facts you might not know about FHA financing.

If you’ve been saving for a home but aren’t sure if you have enough for the down playment, closing costs and other expenses, a Federal Housing Administration (FHA) mortgage may be just what you need to get off the fence and into your dream home. There are many benefits of a FHA loan. These loans are easier to qualify for than conventional loans and they don’t require a 10 to 20 percent down payment. FHA mortgages usually require a 3.5% down payment and closing costs of 2-3% can be rolled into your mortgage, which means you need less cash upfront.

The FHA, a government entity that is part of the U.S. Department of Housing and Urban Development provides mortgage insurance and loans made by FHA-approved lenders. FHA is self-funded and has insured more than 34 million properties since 1934.

There is more flexibility in calculating household income and payment ratios for FHA loans, unlike conventional loans. These loans require very little cash upfront to close and mortgage insurance is typically included in the mortgage payment.  FHA home mortgage refinancing can help applicants who want to keep their homes and prevent damages to their credit ratings. The advantages of refinancing with a FHA ,loan include lower, fixed interest rates and predictable payments.

FHA home loans have requirments for income, debt-to-income ratios, maximum loan amounts and other detail. Each FHA loan is unique and must be applied for individually. FHA mortgage loans should take no more than 29% of your monthly income.

Source: www.traviscu.org


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