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You’ve Heard of Them, But What Are They? The ABCs of FHA Loans

You’ve Heard of Them, But What Are They? The ABCs of FHA Loans

Social Media Blurb: FHA Loans Make Your Money Work For You

The ABCs of FHA Loans

FHA loans have become one of the most popular alternatives for borrowers unable to qualify for traditional loans. The Federal Housing Administration insures these mortgage loans, and qualification eligibility is assessed on a different set of criteria than loans backed by a bank.

The first step: housing appraisal. Because an FHA loan is made based on the equity of your home, an approved appraisal service must assess the financial worth of the home in question. Equity is determined by the overall market value of the house and the amount of money outstanding on any current property lien. Depending on the assessment and taking in the location and condition of the home, the maximum loan amount will vary. Once this is complete, the process of acquiring an FHA loan is officially underway.

FHA loans are popular for a number of reasons:

1. They present adequate protection for the lender in the event of default on the part of the borrower.
2. FHA loans are accessible to anyone with a housing asset to leverage.
3. Credit requirements are also much less stringent.

FHA loans have terms in place to protect the lender (in this case the government) in the event of default by the borrower. When you leverage your house, the lender has rights of seizure if you fail to pay back the money in a timely manner. As with any loan, it’s a personal financial decision that should be carefully evaluated before commitment. For more information about FHA loans call 803-765-1680 or toll free 800-854-9484 to speak with an expert.

Posted Aug 08, 2013 by Midland Mortgage Corporation