FHA- (F-H-A) insured loans are mortgages administered by The Federal Housing Administration. The FHA neither builds homes nor lends the money itself. Rather, it insures approved lenders willing to offer these mortgages against foreclosure loss if you default on your loan. As a result, with the protection provided by the FHA, these lenders are able to offer low-interest and low-down payment loans to borrowers. FHA-insured loans are also usually easier to qualify for than conventional loans and often are assumable by future purchasers. They're generally seen as a good option for first-time buyers with little to invest in a down payment or borrowers with limited income. Anyone who has a satisfactory credit record, enough cash to close the loan, and sufficient steady income to make monthly mortgage payments can be approved for an FHA-insured mortgage. These loans, however, do place limits on the amount you can borrow. Eligible buyers can usually put down as little as 3 percent of the FHA appraisal value or the purchase price of the home, whichever is lower. Both fixed- and adjustable-rate FHA loans are available, and in most states, FHA loans can be used for refinancing. If you're interested in obtaining a FHA-insured loan, apply with a U.S. Department of Housing and Urban Development, or HUD (hud), approved lender. These loans generally don't take any longer to process and close than conventional loans.
©2006 Crossroads Mobile. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
