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Traditional Mortgages

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Can I be a homeowner? Finding a home Making an offer on a home Applying for a loan Inspections The closing process Real Estate loan glossary Important Resources

Understanding Traditional Mortgages FHA Loans VA Loans Understanding Home Equity Borrowing Against Your Equity Helpful Steps to Take Before Buying Predatory Lending Additional Resources

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Traditional Mortgages

FHA Loans

The FHA (Federal Housing Administration) provides mortgage insurance to help consumers become homeowners. So an “FHA loan” isn’t really a loan, it’s a program that insures home loans. The FHA insures lenders from losses associated with homeowner default, which helps lenders prepare mortgages for people who might not otherwise qualify for a loan. To keep things simple, most mortgage lenders call any loans insured b y the FHA, “FHA Loans.”

An FHA loan may be a great solution for you if:

• You want to buy a house with a small down payment.
• You are a first-time home buyer.
• You have lower credit or even no credit.
• You are concerned that you don’t make enough money to qualify for a home loan and cover all expenses.

Probably the most attractive thing about FHA loans is they allow qualified consumers to buy a home with a small down payment – only 3.5% in most cases. That’s one of the lowest down payments for any mortgage loan offered in today’s economy.

A reputable lender will counsel you on whether an FHA loan is a good fit for your needs. Many home buyers mistakenly believe there are maximum income levels that prevent them from qualifying for a FHA loan. Not true. There are county-specific maximum home loan amounts however, so as with all questions about a mortgage, the best thing to do is visit with a lender. They will do a check of your situation since they handle each mortgage loan individually.