A Quick Overview

Federal Housing Administration, or FHA, loans have been around since 1934, and these loans are meant to help buyers purchase their home for a lower down payment. The government insures the loan, allowing lenders like us to offer you a better deal for your mortgage. The buyer is required to pay the premium on the mortgage insurance, but because of this insurance, buyers can potentially purchase a home for as low as a 3.5% down payment. This makes FHA loans an excellent option for someone who has less money to put down, someone who has a higher debt-to-income ratio, or someone whose credit is less than perfect.

Specifics to Consider

FHA loan terms are for 15 or 30 years, and the loan type can be fixed or adjustable. Consider your monthly expenses, monthly income and how long you plan on staying in your home. Depending on these variables and the housing market, one loan type, fixed or adjustable, could be better for you than the other. (For more on fixed and adjustable rate mortgages click here). Another thing to know when looking at an FHA loan is that the maximum loan varies by location and counties. Check the FHA loan limit for your county to get an idea of what housing options are realistically available for your location.

Talk to a Professional

Talking to a professional can save a lot of time and stress. A good real estate agent can help you find a house you love. Talking to a good loan officer can help you understand the specifics about your mortgage loan, and they can answer other questions you may have about home finances. These people will help make your experience easier and more enjoyable, so don’t be afraid to reach out to them.