FHA - Is this an Option for You?
There has been so much in the media about subprime loans, foreclosure and even FHA. I thought it would be best if we get a clear understanding of what FHA is so readers can make an informed decision regarding solutions to housing options.
First, let’s look at what FHA even stands for. FHA stands for Federal Housing Administration and maybe you are reading this saying, I knew that. But what about the person that didn’t. FHA is a government backed agency that provides insurance for mortgage loans. FHA has been around a long time and has not always had a good reputation. But what business do you know that has not weathered some storms. They have their ups and downs.
I read recently about an annual conference of the Mortgage Bankers Association that was in
Boston on the CNNMoney.com website and they were sharing how the mortgage industry would be returning to a back to basics theme which included the FHA. When the FHA was originally created in 1930s, was intended to provide lenders with sufficient insurance. In the 1980s, the FHA’s refinancing department came into existence. I even remember hearing about FHA loans when I was growing up. I only heard about it but didn’t know who it was really for.
As I prepared to purchase my first house, I heard about FHA loans again. I took the time to research and find out what FHA really means and who did they help. In the beginning FHA’s goal was to provide an adequate home financing system through insurance of mortgages and to stabilize the mortgage fund. Well, they have definitely expanded on what they do today. They play a crucial role in financing minority borrowers, first time home buyers and borrowers who have troubled credit history. We both know there will always be borrowers that have less than perfect. I am glad to see they have viable options to obtain the American Dream.
What is your present housing situation? Are you renting, planning on purchasing a house within six months to a year or are you in a foreclosure situation? Is this an option for you? Could be – this is one reason to research the different types of loans so you can make an informed decision before you sign on the dotted line. One of the benefits of an FHA loan is borrowers with less than perfect credit can receive a favorable interest rate. I know for me it was important that I received a good interest rate that I felt was favorable especially when it came to how that affected my mortgage payment. I encourage you to do your research because FHA loans are not for everyone. Come back and read next time, when we will discuss some of the parameters before you even apply for an FHA loan. Knowing the information can help you avoid foreclosure even in the beginning of the process. Come back and visit us often for more up-to-date information and news regarding FHA.
