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The American dream of owning your own home is live and well in the United States because of the FHA Home Loan Program. The market for FHA Home Loans is booming and it is now the largest supplier of home mortgages. You can make your dream of owning your own home come true now!
The Federal Housing Administration (FHA) has many loan programs available that will help you achieve your goal of owning your own home.
What Is A FHA Home Loan?
FHA does not loan you the money to buy a house, what it does do is guarantee the loan. If the mortgage is defaulted then FHA will pay the lender.
This helps the lender because they will not have to write off the mortgage and suffer all of the loss.
Because of the FHA guarantee, lenders are certainly more willing the make more loans, and they will make them for larger amounts and also they will make them easier to get with fewer requirements.
Can You Qualify For The FHA Home Loan Program?
Of course, there have to be some limitations and requirements in order to get a FHA Home Mortgage. Here are a couple of restrictions:
Debt To Income Ratio
There is not an income limitation but you do have to have a certain debt to income ratio. This means your debt can not exceed a certain percentage of your income.
Limit On Amount Of Mortgage
Also, there is a restriction on the amount of the mortgage based on the area that you live in. Each area or region is different, you need to check with your FHA lender to see what the limit is in your area.
Is A FHA Home Mortgage Right For You?
A FHA Home Mortgage may not be right for you because of the limitation on the amount of money FHA will lend in your area. If you are looking at a $250,000 house and the loan amount limitation in your area is $200,000 then this type of mortgage will not work for you.
But, you can qualify for the FHA Home Loan Program then they can be great way to finance your new home or even refinance you existing home.
What Are The Benefits Of A FHA Home Loan?
1. You finance home improvements or repairs using a Streamlined FHA 203K Loan.
2. All FHA mortgages can be assumable. This can be a great benefit in the future if you want to sell your home and the interest rates are high.
3. The down payment is just 3.5% of the purchase price of your home. Most conventional home loans require at least 20% down payment.
4. Your down payment can be gifted to you.
5. Seller can pay your closing costs.
6. Credit scores can be as low as 585, but in today's mortgage market most lenders requires at least a credit score of 620. So, if your credit scores are a little low then a FHA mortgage may be for you.
7. Interest rates are low and very competitive with other types of mortgage loans. Because of the FHA guarantee most lenders will offer low interest rates.
With the low interest rates in the market and the abundance of homes on the market, now may be the time for you to persuade the American dream of owning your own home by financing it with a loan form the FHA Home Loan Program!