Benefits of FHA Mortgage
FHA mortgages are gaining popularity in recent years for first home buyers across the country. These types of mortgages are provided by FHA-approved lenders and insured by the Federal Housing Administration borrowers who can not meet the stringent requirements of conventional loans are still able to get mortgages.
There are several advantages of FHA mortgages versus other mortgage products. Some of them are:
1.FHA mortgage lending requirements are more favorable compared with other traditional mortgages, including conventional mortgage loans.
2.FHA have lower mortgage payments and can be as low as 3.5 percent compared to traditional loans that may require further payment of 20 percent.
3.As initial payments can be as low as 3.5 percent, borrowers can borrow almost 97 percent of the value of the home, which means less upfront cash requirements.
4.The closing costs are generally low in this type of mortgage loans, since they are regulated by HUD.
5.For fixed FHA mortgages, rates are fixed for the life of the loan, so borrowers do not have to worry about your rates.
6.Also requirements of the FHA mortgage loans are not as strict compared with the standard mortgage.
7.Borrowers may also qualify for FHA loans, even if they were failures in the past, but must be at least two years old and have a good credit history for the next two years.
8.Likewise, if borrowers had foreclosures, which must be three years and must have good credit for the next three years.
A disadvantage of FHA home loans is that borrowers must pay mortgage insurance for loans. Mortgage insurance is usually 0.5 percent annual total loan amount and is charged to homeowners on a monthly basis.
Total mortgage is an FHA-approved lender and now offers some of the best mortgage rates for FHA in the industry. At 30 years set by the FHA is available to qualified borrowers for a low 4.125 percent and 5,293 percent in April.