What You Wish You Knew Before Applying For a FHA Loan

The option of receiving an insurance-backed mortgage loan via the FHA-approved lenders is one of the best things for helping out single/multifamily purposes. Apart from the borrowers, the lenders have peace of mind as well because they’d be protected even if a defaulted loan may surface. As attractive as it sounds, anyone applying for a FHA loan should be aware of the following.

You Don’t Get the FHA loan from the Government

The Federal Housing Administration serves only to insure the loans that a private lender commits to you, that is, if you ever fall back on the payments after having taken out the mortgage, then the FHA is going to reimburse the individual company or bank for the losses they’ll incur. However, this additional protection, encouraging the FHA-approved lenders to consider even those people who’re otherwise not eligible for conventional loans, comes from two premiums – upfront and annual – that the homeowner is charged with.  

They’re Not Restricted to a Particular Type of Homebuyers

It’s a fallacy really that you cannot use the FHA loans for multiple needs, which includes refinancing, home purchases, and renovations. Moreover, it’s not just the ‘modest’ homes that a FHA loan can fund for you; from single-family to extravagant multi-family units, the lenders do allow individuals for loans up to $625,500 for instance. Plus, you’ve the option of opting for either adjustable-rate or fixed mortgages, whichever you feel more comfortable with.

You can Get Help with Closing Costs

The program is for giving in more than one case. As an individual struggling to get mortgage may find out that a damaged credit score doesn’t help anymore than a foreclosure or filing for bankruptcy does, especially for the benefit of the 3.5% down payment requirement. FHA allows it as it does allow for the homebuilder, seller, or lender to pay some of the closing costs on the individual’s behalf when they are faced with a number of expenses like attorney fee, loan origination fee, and appraisal costs.

Besides providing evidence for your consistent employment and a steady source of income, waiting three years since a foreclosure and two if you were bankrupt, do determine the rate your lender’s going to charge for this prior to applying for the loan via the Good Faith Estimate form. Not all lenders are the same so shop till you find the one negotiated and tailored to your needs.

Be Up to Date with the FHA Requirements

One of the last things that you can do is to visit the FHA official website and see for yourself any changes that the agency has advanced to the loan and what they would imply for you before you conclude the loan terms in a hurry. You, for instance, end up making a wrong decision if you’ve no idea about the higher annual mortgage insurance premium (MIP) as well as mortgage insurance payment that the FHA announced in early 2013 for the time duration of specific FHA home loans and about how you can calculate it for your own thing.

For more information visit website http://www.fhaloansearch.com/