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Fixed-Rate FHA Home Mortgage Loan

This is the most common type of FHA home mortgage loan. If you choose a fixed-rate FHA home mortgage loan, your interest rate will remain the same for the duration of the loan's term (typically 30 years). Some lenders also offer 15-year fixed-rate FHA loans. One advantage of a fixed-rate FHA home mortgage loan is that you will enjoy a consistent monthly payment for the life of the loan. Some people find it easier to budget when they know what mortgage payment to expect each month. Additionally, a fixed-rate FHA home mortgage loan will insulate you from future rate increases. On the down side, fixed-rate FHA home mortgage loans sometimes have higher monthly payments initially than do adjustable-rate loans.

Adjustable-Rate (ARM) FHA Home Mortgage Loan

If you know money is going to be a little tight when you first buy your home, it is in your best interest to make your initial payments as low as possible. With an adjustable-rate FHA home mortgage loan, you can minimize your payments at the beginning of the loan by agreeing to rate fluctuations later in the term. An adjustable-rate FHA home mortgage loan gives you low, fixed payments for a specified period, after which your payments and rates will fluctuate according to market conditions. Unlike traditional adjustable-rate mortgages, the adjustable-rate FHA home mortgage loan comes with a 1-2% cap on how much your interest rate can rise annually. Similarly, your FHA home mortgage loan also guarantees no more than a 5-6% interest rate increase over the life of the loan. If you can deal with the fluctuations and uncertainty inherent in an ARM, then this type of FHA home mortgage loan might enable you to afford more house than you otherwise could.

Purchase/Rehabilitation FHA Home Mortgage Loan

This loan is for people considering purchasing a house that will require substantial repairs or renovations. The purchase/rehabilitation FHA home mortgage loan will allow you to take out one mortgage that includes the cost of repairs to your single-family home. The amount of your mortgage will be determined by the expected value of the home once the repairs are complete. This type of FHA home mortgage loan is convenient for people who would like to take out one loan for the purchase and renovation of a home.

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