Many new and second homeowner’s use FHA loans. The market can be confusing and here are some helpful facts to help you in your home buying process. Qualified Lenders offer FHA loans, considered mortgages, and these mortgages are insured by the Federal Housing Administration (FHA). Many buyers still do not totally understand the benefits that can be had from FHA Loans.
Here are some interesting facts.
- Low-income borrowers are not the only one’s to benefit from FHA Loans.Â There is no maximum income restriction.
- FHA loans can be for more than first-time home buyers.
- FHA loans are not only for lower priced homes. Loan amounts for FHA can be almost $800K. The loan amount cap was originally around $363,000 and increased to almost $800K to help stabilize the housing market.
- FHA does not have anything to do with low-income housing. Simply FHA loans are mortgages that are insured by FHA.
- FHA loans, in many cases, are more affordable conventional loans and allow the borrower to have a smaller down payment.
- More lenders are willing to loan to to FHA (the federal government) that assures repayment.
- FHA loans can be assumed. This means a new buyer can take over the payments as long as they bring the seller’s current equity (cash in the home) to the table. This works well when interest rates have risen greatly compared to what the seller’s current mortgage interest rate is.