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Is an FHA Home Mortgage Loan Right for You?

If you think homeownership is out of reach for you, think again. The purpose of the FHA home mortgage loan is to help people afford homes and qualify for mortgages that they otherwise could not have. If you fall into any of the following categories, you might consider an FHA home mortgage loan:

• You don't qualify for a traditional mortgage loan
• You have credit challenges
• You're worried that your monthly payments will increase
• You are a first-time homebuyer
• You can't afford to make a traditional down payment
• You would like monthly payments that are as low as possible
• You fear what will happen if you get behind on your mortgage payments

Advantages of an FHA Home Mortgage Loan

Now that you know if an FHA home mortgage loan is right for you, learn what it can do for you. Here are some of the most attractive benefits of an FHA home mortgage loan:

• Less stringent qualification standards. Even if you don't qualify for a traditional mortgage, you can still qualify for an FHA home mortgage loan. Lenders are more willing to originate a loan when they have the protection of federal insurance.
• Lower cost. Since lenders have the safety of federal insurance with an FHA home mortgage loan, they can offer lower rates on this type of mortgage. Compared with traditional mortgage loans, FHA loans are much more affordable.
• Additional protection. The thought of what might happen in the event of economic hardship is a large deterrent for most people when considering a mortgage. However, with an FHA home mortgage loan, you have the added security of FHA protection to help you keep your home even in times of financial hardship. Your FHA home mortgage loan will offer you several options to help you avoid foreclosure if you have financial difficulties.
• Buy a home with less-than-perfect credit. Qualifying for decent rates on a traditional mortgage requires close to flawless credit. With an FHA home mortgage loan, on the other hand, even people with serious credit challenges (late payments, bankruptcy, charge-offs, etc.) can still qualify.
• More affordable down payment. Very few people can make the 20% down payment that is expected with regular mortgages. On FHA loans, the down payment is 3%, which makes homeownership a possibility for many more people.

Learn about FHA Home Mortgage Loan categories.