An FHA insured loan is a mortgage that is guaranteed by the Federal Housing Administration against default
The Federal Housing Administration (FHA) runs several programs to promote home ownership across the United States. The FHA guarantees the lender that they will insure the loan.
This guarantee makes it easier for some buyers – like those with smaller down payments or less-than-perfect credit – to qualify for a mortgage. FHA loans are a cost effective way for people to qualify for a mortgage, but they’re not for everybody.
An FHA insured loan might be right for you if:
Your credit is good, but not perfect A portion of your down payment or closing costs is a gift, rather than employment or investment income
You want to pay off your mortgage early, without penalties
There is no minimum income requirement for FHA insured loans, so almost anyone can be eligible. FHA mortgages are also available in a variety of terms just like conventional loans, from 15- and 30-year fixed, to various ARMs, which also makes them attractive to many borrowers. Ask your Great Western loan officer about the many available types.
However, it’s important to realize FHA insured loans may not be right for all buyers. Here are a few points to consider before setting your sites on one:
FHA mortgages are typically available for smaller amounts than other mortgages, so in some cases, you may not be able to borrow enough to finance your dream home
Borrowers can only hold one FHA-insured mortgage at a time
Talk to your Great Western loan officer about FHA insured loans to determine if they’re right for you. While the benefits are obvious, for some borrowers a traditional mortgage might be more cost-effective. We’ll work with you to help you figure out what’s best for your unique situation.