FHA loan is a federal mortgage insurance program administered by the Federal Housing Administration. The loan may be issued by a HUD approved FHA lender.
FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. Somerset offers free quotes online and over the phone: Visit for contact information.
The FHA does not make loans. As in the Veterans Administration's VA loan program, the applicant for the loan must make an application with an approved lender. Somerset Has been an FHA approved lending institution since 1979.
The borrower, who pays a monthly mortgage insurance premium of one half of 1 percent on declining balances for the lender's protection, receives two benefits: a careful appraisal by an FHA approved appraiser and a lower interest rate on the mortgage than the lender might have offered without the protection.
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On March 6, 2008, the "FHA Forward" program was initiated. This is the part of the stimulus package that President Bush had in place to raise the loan limits for FHA.
How to obtain an FHA LOAN:
FHA does not make loans. Rather, it insures loans made by private lenders such as Somerset Mortgage Lenders. Somerset Mortgage Lenders has been in business since 1979, has a flawless BBB record.
The first step in obtaining an FHA loan is to contact several lenders and ask them if they are approved to originate FHA loans. As each lender sets its own rates and terms, comparison shopping is important in this market.
Second, the potential lender assesses the prospective home buyer for risk. Based on monthly income and expenses, which is one risk metric considered by the lender. The analysis of one's debt to income ratio enables the buyer to know what type of home can be afforded. Other factors, e.g. payment history on other debts, are considered and used to make decisions regarding eligibility and terms for a loan.
FHA's mortgage insurance programs help low and moderate-income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages lenders to make loans to otherwise credit-worthy borrowers and projects that might not be able to meet conventional underwriting requirements, protecting the lender against loan default on mortgages for properties that meet certain minimum requirements-including manufactured homes, single, two, three & four family homes. The basic FHA mortgage insurance program is Mortgage Insurance for One - to Four - Family Homes.
FHA allows first time homebuyers to put down as little as 3.5% and receive up to 6% contribution from the seller towards closing costs. If little or no credit exists for the applicants, the FHA will allow a blood relative, such as Mom or Dad, to co-sign for the loan without requiring them to reside in home with first time homebuyer. This is called a Non-Owner-Occupied Co-Borrower.
The above is for your educational needs and a simple history lesson for those who are misinformed about the mortgage industry. Somerset Mortgage Lenders is here helping many people in this industry become home owners while also helping those get their lives on track. We would love to hear from you and if needed, help you in the future!
Somerset Mortgage Lenders strives to meet demands in today’s Mortgage Industry by establishing a successful partnership with our customers, staff, investors, and markets that respect the interest and goals of each party.
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