Homeowners should clearly understand what the FHA loan is all about before you decide you should obtain one. FHA which is also known as Federal Housing Administration, does not make loan or guarantees it but instead it insures the loans. All FHA mortgage loans require mortgage insurance. Lenders pay FHA with the insurance that is collected, which reimburses in the event of a loan default. The FHA mortgage loan program’s goal is to improve housing standards and conditions.
Two Types of FHA Mortgage Insurance
| Mutual Mortgage Insurance | The remaining balance of the loan will be paid by the insurance. In return, over the life of the loan the payment will decrease gradually. The amount will be collected monthly on approved condominiums. |
| Mortgage Insurance Premium | This insurance has a one time fee of 2.25% of the loan amount. This applies to single family residences and planned unit developments. This fee can be added to the base loan and 100% financed. |
Different types of FHA mortgage loan programs
EWMortgage.com network of lenders offer FHA mortgage loan programs of: FHA mortgage (adjustable rate), FHA loan (fixed rate), energy efficient loan, growing equity mortgage, FHA loan for condominium units, and graduated payment mortgage.
| FHA Mortgage (adjustable rate) | If you are trying to transition into home ownership then you might want to consider this type of FHA mortgage. It is great for low and moderate-income families. |
| FHA Mortgage Loan (fixed rate) | This mortgage loan This mortgage loan program benefits people who would like to purchase a home but have not been able to, because they have not been able to put money away |
| Energy Efficient Loan | This FHA loan program is a great way to lower your monthly utility bills. This is done by adding energy efficient improvements into homeowner’s new or existing housing. |
| Growing Equity Mortgage | If you are becoming a first time homebuyer or young family, this type of FHA loan is tailored to meet the needs of consumers. It does not hold consumers the responsibility to the upfront and monthly cost that is involved in a loan. |
| FHA Mortgage Loan for Condominium Units | This is a great way for low and moderate-income renters to avoid risks of being displaced. |
| Graduated Payment Mortgage | If you have a low and moderate income but you are expecting them to increase over the next 5 to 10 years then you should consider this loan program. |
Benefits of a FHA Mortgage Loan
There are many great benefits that come with an FHA Mortgage loan that most consumers do not know about. Your down payment can be as little as 3% of the purchase price of your home. Your mortgage loan finance includes the closing cost. You receive a maximum of 1% origination fee, no credit score requirements; you can qualify for a FHA Mortgage loan two years after bankruptcy, or three years after foreclosure.
