FHA loans are mortgage loans which are insured through the Federal Housing Administration. Nearly every home buyer in today's market is faced with the choice of a conventional or FHA home loan. In past years first-time home buyers were most likely to acquire an FHA mortgage loan, as most existing buyers had the equity to invest in a down payment. Nowadays, this isn't as typical, which has made the FHA program increasingly popular.
Because FHA home loans are insured by the government, borrowers in Louisiana can purchase a home with little to nothing down. However, there are other advantages and reasons to consider borrowing through the Federal Housing Administration. Borrowers that may have difficulty qualifying or getting approval by a conventional mortgage lender should look into whether this program can match their financial situation. Another benefit is that FHA loans are assumable, which means that a new buyer can simply take over an existing mortgage.
People who have bad or low credit, have been foreclosed on, or have undergone bankruptcy may still be able to borrow. There are some qualifications and other terms and conditions that should be mentioned. Because FHA lending doesn't have the same strict standards that traditional loans do, the house must meet specific criteria and be appraised through an FHA certified appraiser. A mortgage insurance premium is required up front, or can be included in the monthly payments.
A federally insured loan reduces many risks and allows a mortgage lender such as Sun Mortgage Funding of Haughton, LA to make loans with less stringent credit requirements. As well as offering lower down payments and lower interest loans, FHA programs also provide many educational resources and guides designed to help new homeowners in Louisiana manage their budget and expenses.
With an FHA loan, there are no penalties for prepayment that conventional lenders often require when loans are paid early. Traditional lending institutions impose this penalty as a means to discourage buyers from habitually refinancing. Also, with an FHA home loan, the borrower can have all closing costs included in the mortgage. Normal mortgages require that closing costs are paid when closing the deal, and thus are not included in the loan amount.
To qualify for an FHA loan, borrowers must have a strong employment history, lawful residency and legally old enough to enter into a mortgage agreement. New FHA home loans are only for primary residence occupancies. To learn more, please visit the professionals at http://www.sunmortgagefunding.com today.