Meaning of FHA loan

Asked by Truong.shirley, Lawrenceville, GA Mon Aug 5, 2013

I would like to understand more about FHA loan. What does it really mean?

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7
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Tue Aug 6, 2013
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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Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
1 vote
carlos parra…, Other Pro, Monrovia, CA
Tue Aug 6, 2013
A lot of good answers below, however, there is also a negative to an FHA loan. That is; when you buy, the property has to be up to a minimum standard, which in many cases means that the Seller has to make and pay for repairs in order for the property to qualify for that standard. This means that since the Seller has to pay for and make the repairs, your offer has to be higher than someone else's who is bidding without FHA financing.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Tue Aug 6, 2013
It means you can pay only 3 1/2 percent as a down payment on a home. You have to provide all your financial information to a qualified loan officer to be sure you qualify for FHA financing.
0 votes
Annie Ritz, , Los Angeles, CA
Tue Aug 6, 2013
This is a helpful link that lists the 7 top things to know about FHA loans. I hope this helps!

http://www.bankrate.com/finance/real-estate/7-things-to-know…
0 votes
Katherine Jo…, Agent, Rancho Cucamonga, CA
Mon Aug 5, 2013
Loan inured by Federal Housing Authority. It also have mip.
0 votes
Jerome Spinn…, , Cerritos, CA
Mon Aug 5, 2013
its a loan typically for first time homebuyers due to its low down payment requirements. But, I have other attractive programs that I am sure will get you more for your money.
0 votes
Johnny James, Agent, Palmdale, CA
Mon Aug 5, 2013
An FHA Loan is a mortgage insured by the Federal Housing Authority. The require 3.5% down payment and you do not need perfect credit to qualify for the loan.
0 votes
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