FHA Loans versus Conventional Home Mortgages

FHA Loans versus Conventional Mortgages

Before you ask your financial institution for a standard, conventional home loan, consider asking about a Federal Housing Administration (FHA) loan instead. In this article we'll cover the basics of an FHA loan, why you should ask for one and how they measure up to conventional home loans. Keep reading to learn more.

What is an FHA home loan?
An FHA home loan is still issued by a private financial provider, but it's insured by the Federal Housing Administration (FHA). Essentially, this provides the lender with greater security and you with lower monthly payments.

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Why should I ask for an FHA loan instead of a conventional loan?

It's easier to qualify for an FHA loan. Because the mortgage is insured by the FHA and the U.S. Department of Housing and Urban Development, lenders are more likely to issue the loan.
You can still qualify with poor credit. Even with past credit problems like a bankruptcy, an FHA loan is easier to qualify for than a conventional mortgage.
A lower down payment. An FHA loan only asks for a 3% down payment, which is significantly lower than some banks' requirements of 10-20%.
The loan costs less in the long term than a conventional loan. Because the FHA can offer more competitive interest rates, you'll often receive lower rates which will save you a lot of money over the term of your loan.
FHA offers foreclosure protection. Unlike many lending institutions, the FHA doesn't want to see your mortgage foreclosed. So, they have a number of programs designed to help homeowners who are in trouble. This can be a great resource if you hit hard times.
Energy efficiency credits. The FHA allows prospective homeowners to include the cost of energy efficiency upgrades into their mortgage, meaning you can get extra cash to make your new home more energy efficient.


	Whether you are a first time homebuyer with less than perfect credit or you are buying your second home, FHA loans are a great solution for borrowers looking for a good rate with a small down payment. Continue to our online FHA application to get up to 4 free offers.

How do I qualify for an FHA loan?

You must meet the basic FHA credit rating requirements. While these are lower than most banks and lending institutions that offer conventional loans, you'll still be subject to a credit check.
Your mortgage must not exceed the maximum amount available in your county. On their web site at www.hud.gov, the U.S. Department of Housing and Urban Development maintains a list of maximum amounts sorted by county.
The property you're buying must not exceed four units.
The potential property must be appraised and inspected. You can subtract the cost for this from your down payment requirements.

All in all, an FHA loan works out to a much better borrower's deal than a conventional loan.

A professional consultant is always available at Loan Choice Direct, so please call us (1-888-523-8523) today to find the best solution for your needs.

You can also apply with our quick and easy FHA application and one of our financial consultants will get in touch with you shortly.


	Looking for an FHA home loan? Apply Online Now to get up to 4 free quotes to find a great rate. Loan Choice Direct can even help you refinance your existing mortgage to lock in a great fixed rate with an FHA Streamline Refinance. Continue to our online FHA application to get up to 4 free offers.

For information on practical home mortgage recommendations, please visit http://www.home-mortgage-preparation.com, a popular site with great insights about home loan considerations, such as private money lenders, FHA loan limits, and many more!

Article Source: http://EzineArticles.com/?expert=Jack_Burnette

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