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About FHA Insured Loans

An FHA loan is a mortgage that is insured by the Federal Housing Administration and issued by an FHA approved lender. Because the government is essentially guaranteeing it will pay the mortgage if the borrower cannot, the rates on FHA loans tend to be lower.

Here are some more facts about FHA loans:

• The typical down payment on an FHA loan is usually about 3%, which is much lower than the typical down payment on a conventional mortgage.
• FHA insured loans are usually better for first-time home buyers, lower-income home buyers or buyers with less-than-perfect credit.
• FHA approved lenders usually charge lower interest rates and lower closing costs than traditional mortgage lenders.
• Borrowers pay a small mortgage insurance premium (MIP) on FHA loans, as well as a small monthly fee.
• FHA loan requirements make qualifying for an FHA loan easier than qualifying for a conventional loan. While the lender will perform a credit check and verify your income, you do not need a "perfect" credit score to qualify.
• There are no minimum or maximum income limits to qualify for an FHA loan.
• There is no minimum credit score requirement with an FHA loan. Like any loan, the better your credit score, the better your interest rate.
• Borrowers must be legal United States residents and have a valid Social Security number.
• The Federal Housing Administration offers several leniency programs to help borrowers facing financial difficulty avoid foreclosure.

It's always in your best interest to shop around for the best mortgage terms, which includes taking a look at how traditional mortgages compare with FHA insured mortgages. Contact Embrace Home Loans today so we can help you decide if an FHA insured loan is right for you!