FHA is a government insured loan. What this means is that the government offers insurance to lenders for loans that meet FHA lending parameters, which are more flexible than conventional loan requirements. So a lender allowing less than perfect credit, a 3.5% down payment as oppose to a 5% or higher, less credit requirements, etc, will have the insurance from the government as long as it meets it's requirements.
To you as a borrower, it's just another financing option that allows you to finance all your closing costs and a lower down payment, among other benefits. As good as it may sound, FHA's mortgage insurance has become very expensive, so I find that if a buyer is able to qualify for a conventional loan, it results in a lower monthly payment and cheaper loan. FHA is just another option, but not always the best option. It all depends on your specific financial situation.
Speak with a Loan Officer and let them review all necessary documents. Doing so, they'll be able to inform you of your best financing options, monthly payments, and pretty much all the #s involved so that you can then determine if FHA works for you or not.
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Senior Loan Officer
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax