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FHA Loans

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An FHA Loans is a loan insured against default by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make large mortgage loans.


FHA Loans are not for everybody. But for those who qualify, FHA loans are a great help. FHA Loans allow people to buy a home with a down payment as small as 3.5% - something that isn’t possible with other loan types.


FHA Loans also offer other advantages, including but not limited to the following:

  • Easier-to-use funds for down payments and closing costs
  • No prepayment penalties (a huge plus for sub-prime borrowers!)
  • The loan may be assumable
  • Possible leniency during financial difficulty
  • Funding for home improvement (through FHA 203k programs)

While FHA Loans are a great advantage, it must be remembered that they are not the right answer for everybody. Some fees that aren’t seen with more conventional loans are added to FHA Loans, in order to make FHA default payment possible. FHA Loans also may not offer enough funds in case of a large mortgage. And you just might find that if you have good credit in particular, you can find competitive loan offers elsewhere that beat FHA Loans.


So do your research, and determine whether an FHA Loans is right for you. You just might find that it isn’t. But if it is, take advantage of the FHA loan’s many benefits and call us today!