FHA Loans: America's Favorite Mortgage
What appeals to many first-time homebuyers about FHA loans are the lenient eligibility requirements. But whether you're buying your first home, or just moving to a new one, the FHA loan program can help you finance a home with low down payments and flexible guidelines.
A popular FHA program is the fixed-rate mortgage, in which the interest rate remains the same through the term of the loan. With this constant interest rate, monthly payments don't change. Fixed-rate mortgages come with terms of 15 or 30 years.
Adjustable-rate mortgages have an interest rate that—after an introductory period—varies for the life of the loan. The interest rate changes annually, going higher or lower, reflecting the fluctuating market indices approved by the FHA. The FHA has a few adjustable-rate mortgage options that can suit the needs of many borrowers.
This construction loan is an FHA program that finances the lot purchase, construction, and permanent loan of a new home in a single mortgage. You need only qualify once and pay a single set of closing costs. Your fixed-interest rate is locked in and the entire loan is in place before construction on your new home begins.
The FHA offers this type of loan to borrowers who expect their income to increase. The Graduated Payment Mortgage initially has low monthly payments that then gradually increase according to one of five available plans, which have varying lengths and rates.
Growing Equity Mortgages (GEMs) are part of the FHA's Section 245(a) loan type that start off with lower initial payments, and increase according to a predetermined schedule over the life of the loan.
The FHA's Energy Efficient Mortgage program (EEM) finances energy-efficient home improvements for FHA borrowers. This helps homebuyers save money on household utility bills so that they can afford to make monthly payments on their home mortgage.
The FHA helps finance the purchase of condominiums with what is called a Section 234(c) loan. This loan can have a term of up to 30 years. It is primarily for residential condos that have at least two units and are located in an FHA-approved condominium projects.
FHA Loan Articles
January 27, 2023Before you get ready to commit to a home loan application, it’s good to review your circumstances and ask a few basic questions about your loan, your plans, and the home itself. Believe it or not, knowing what type of home loan you need is an important step.
January 10, 2023When getting ready to shop for a home loan, it's worth taking a look at your credit report. Your credit score is a big factor when lenders take a look at your loan application, and it plays a huge role in the interest rate you get.
December 23, 2022When it comes to buying a house, saving up for a down payment can be one of the most overwhelming aspects. While down payments are one of the biggest obstacles for many in the mortgage process, it helps to understand the ins and outs of why they play such a big role.
November 30, 2022Buying and financing a home is complicated and can become overwhelming. It's important for you to stay informed, and know what your options are. So, start with the basics and read about the four different mortgage types available before approaching a lender.
November 8, 2022The fact is that repairs and renovations to your home cost a lot of money. Luckily, the FHA has an option for those with fixer-uppers on their hands. The FHA 203(k) Rehabilitation Mortgages allows borrowers to finance the funds for renovations to a home.
October 17, 2022If you’ve begun your search for a new home and are looking into mortgage options, you’ve likely heard of mobile, manufactured, and modular homes. While people working in real estate throw these terms around easily, it might be something that leaves everyday homebuyers confused.
