nedjelja, 30. prosinca 2012.

FHA Approved Loans– A Boon to Homeowners

An FHA loan is actually a type of mortgage, which is provided by certain loan companies or lenders approved by the federal government. The loan amounts are larger, the down payments lesser and the loan periods longer for FHA loans. The loan companies allow this because the home loan is approved and insured by the Federal Housing Administration (FHA).
An FHA loan is actually a misnomer; it does not refer to a loan at all, but to a mortgage that is issued by lenders who are qualified by the Federal Housing Administration (FHA), and is also insured by the FHA. This means that the FHA will cover the payments if the borrower defaults on the loans. These FHA loans are mainly designed with the purpose of helping individuals with moderate or low incomes make a down payment of a house or apartment. The FHA approved loan allows the borrower to avail a larger mortgage loan, usually up to about ninety-seven percent of the property value. The insurance provided by the FHA allows the lenders to sanction larger loan amounts and allow longer loan periods.

Qualifying for FHA Loans
These FHA loans are among the easiest loans that an individual can qualify for. The borrower must meet certain simple criteria, such as current employment, a steady work history, the ability to make a certain percentage of the down payment on the property, and a reasonable monthly debt to income ratio. Most lenders or loan companies also have conditions that require the borrower to be out of bankruptcy and/ or foreclosure of a certain number of years, and a certain minimum credit score as well. The loan company or lender may have varying terms and conditions for the FHA approved loans offered by them. The loan companies will ask for several documents, such as your tax returns or employment documentation and photo identity.

Most FHA loans also require a mortgage insurance premium (MIP) to be paid upfront (usually amounting to one percent of the loan). An annual mortgage insurance premium is also usually charged, based on the borrower’s loan to value ratio and the loan term. There is no particular limit on the FHA loan you can avail; your income also holds great value when settling upon the amount of the loan. However, the mortgage limits may vary between states. The FHA loan amount sanctioned may also be affected by the appraisal of the property in question; the property must meet the prescribed standards for you to get the most out of the FHA approved loan.

The criteria to be met for a FHA approved loan are usually more precise, and more paperwork is also required. These home loans can be obtained through the federal government with the help of financial consultants. Real estate and mortgage brokers can also help you apply for and avail FHA approved loans. FHA approved loans allow borrowers to avail increased loan limits, reduced property prices and lower down payments. Many loan companies and lenders also allow borrowers the option to apply for FHA approved refinance loans as well.

Benefits of Applying for FHA Loans
FHA loans differ from the traditional mortgages and loans; FHA loans are definitely much more beneficial for persons who wish to take mortgages on their homes. Lower down payment amounts, no penalties for early repayment, and solely offered for residential property mortgages, FHA approved loans are usually the better of the two mortgage options.