Crucial Facts On FHA Loans

Crucial Facts On FHA Loans

An FHA loan is a mortgage insured by the Federal Housing Administration. The Federal Housing Administration is a government agency within the U.S Department of Housing and Urban Development. Borrowers who receive FHA loans pay for mortgage insurance. This insurance protects the lender in case the borrower were to default on their loan.

Because of this mortgage insurance, lenders can and most often do offer FHA loans with attractive interest rates and more flexible requirements for qualification.

Here are few facts all buyers should know about FHA loans:

1. Less than perfect credit is okay. Each borrowers creditworthiness is considered in context. 
2. Minimum down payment is 3.5%. This is a fraction of the percentage required on most home loans. Borrowers can use their savings as a down payment. Other forms of payment are allowed such as money from a family member as a gift or grants.
3. Closing costs may be covered. The FHA allows home sellers, builders and lenders to pay some of the borrower's closing costs. If the the lender does pay closing costs, the interest rate of the loan is typically higher. 

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**Information courtesy of RIS Media**
http://rismedia.com/2014-03-04/7-crucial-facts-about-fha-loans/2/


Irmo, Chapin & Lake Murray Real Estate – Carl McClure. We here at Exit Midlands Realty are committed to helping you with your real estate needs in Columbia, SC and surrounding areas. Buying or selling is a big decision and should be a smooth transaction. I will guide you through the process with skill and patience. Thanks for the opportunity to prove it. Call me today. 803-331-3224