As a new home buyer, perhaps you’ve considered an FHA loan, a loan insured by the Federal Housing Administration. It offers a low downpayment and is generally quite easy to get. However, there are a few things you may not know about these loans – Marie Otis of CBSHome.com lists several for you here.
If you are in the market for a new home and you are a first time homebuyer, you may be looking at using an FHA loan for your purchase. Ever since the markets housing collapse, FHA loans have a renewed importance for borrowers. An FHA loan is a mortgage insured by the Federal Housing Administration. FHA loans pay for mortgage insurance, which will protect the lender if the borrower defaults. Because of this insurance, lenders can offer lower interest rates with more flexible qualification requirements. Here are a few things to know about FHA loans.
- Less than perfect credit is ok
- Minium downpayment
- Closing costs may be covered
- Lender must be FHA approved
- Mortgage interest is a must
- Extra cash available for repair
- Financial hardship relief allowed