January 17, 2019

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Things You Should Know About FHA Home Loans

Things you should know about FHA home loans

There are many things you should know about FHA loans before you start the application process; myths and half-understood features of this home loan program still confuse some applicants going into the process. What follows should help you better understand the basics of the FHA home loan program.

FHA Loans Are Not Just For First-Time Home Buyers

There is no restriction on FHA loans for those who have purchased a home before. There are no separate terms, qualifications, or other rules for those who have purchased before. All FHA loan applicants who are financially qualified are welcome to apply.

FHA Loans Are Available For Condos, Mobile Homes, and Mixed-Use Properties

Suburban homes are just one of the types of property you can buy with an FHA mortgage. You can purchase condo units in FHA-approved condo projects, mobile homes, manufactured homes, any type of property that is primarily residential, has no more than four living units, and meets FHA minimum standards.

FHA Loans Are For Owner Occupiers

Occupancy of the property you buy with the FHA loan is required. You must live in the property you buy with the FHA mortgage as your primary residence within 60 days of loan closing.

FHA Loans Require A Down Payment

The borrower is required to pay a minimum of 3.5% of the adjusted price of the property as a down payment. This money down is separate from all other FHA home loan expenses.

FHA Loans Come In Fixed And Adjustable Rates

FHA mortgage loans are available in both fixed rate loans and adjustable rate mortgages. The type of loan best for you depends on your financial goals and whether or not you plan to remain in the home for the duration of the loan.

Those who plan to stay in the home for the lifetime of the mortgage should consider the pros and cons of the fixed rate mortgage. Those thinking of selling the property after a few years should examine the adjustable rate mortgage to see if it offers any financial advantage.

The interest rate is negotiated between borrower and lender; FHA does not set or regulate interest rates on FHA mortgages.

FHA Loans Are For Refinances Too

You can apply for FHA loans to buy or refinance a property. There are also FHA reverse mortgages and FHA rehab loans for those who need additional options. Borrowers can refinance into an FHA loan from any non-FHA mortgage.

FHA Loans Are Available From Participating Lenders

Not all lenders offer FHA loans; participating lenders have been given approval to issue FHA mortgages by the Federal Housing Administration.

Joe Wallace - Staff Writer

By Joe Wallace

February 1, 2018

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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