FHA Mortgage Loan

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FHA Mortgage Loan is insured by the Federal Housing Association (FHA) which is an agency of the federal government. The Mortgage Loan FHA nowadays has become very popular all over the world in the last few years and they are issued by lenders who are federally qualified.

The FHA does not offer loans to the borrowers on the other hand it insures the loans that has been given to the borrowers by the private lenders. FHA Mortgage Loan is usually taken by the borrowers who do not meet the requirements for the conventional loan. The loan is taken by the people who would like to buy a home but who do not have sufficient money to do so, such as newly married couples, recent graduates, and people who are still studying. The Mortgage Loan FHA is also taken by people whose credit ratings are bad due to foreclosure or bankruptcy.

The Mortgage Loan FHA limit depends on many factors such as the income of the borrower, the location of the home like area, city, and state, and also on the variety of the house that has been selected by the borrower. The advantages of FHA Mortgage Loan are that they are insured against the risks of defaults and this provides the lender a sense of security. The installments in the beginning are low, so a borrower can easily go for Mortgage Loan FHA even if he does not have a bank balance.

Further, the advantage of FHA Mortgage Loan is that it is the best option when a borrower wants to go for a less amount of down payment for it requires the borrower to make a down payment of only 3%. The disadvantages of FHA Mortgage Loan is that as a higher rate of interest is charged from the borrower, it puts in added pressure on him to pay back a bigger amount of money. Also, as the borrower does not usually have a bank balance, he finds it difficult to pay back the mortgage loan.

The various kinds of FHA Mortgage Loan are:

  • Fixed rate FHA loan
  • FHA mortgages of growing equity
  • FHA energy efficient loans
  • FHA mortgage of graduated payment
FHA Mortgage Loan has proved to be very beneficial for those people who are unable to meet the tough requirements of the regular mortgage. And so the lenders of the Mortgage Loan FHA should launch new schemes which are for the benefit of the borrowers.

Last Updated on 5/26/2011