What Are FHA Loans?

The Federal Housing Administration was created during the for-sale-sign1Great Depression, to make home financing available to many Americans. The FHA insures certain loans made by private lending institutions.

The FHA program is “government-backed financing”. By having government insurance backing a loan, private lenders are more willing to offer mortgages to borrowers they normally wouldn’t qualify. The lender is assured they will get their money back on the loan, even if the homeowner defaults and stops making payments.

In the past, the FHA program was focused on helping buyers in the purchase of a home. Now the program is being opened up to homeowners who want to refinance.

The goal of this new program is to help struggling homeowners who have adjustable-rate mortgages (ARMs) convert to fixed rates. It’s also created to lower their mortgage rates.

Homebuyers need to pick loan programs based on their credit history. 
Because of an influx of new home loans creating more financing options, many 
people are buying or refinancing homes with poor credit. Even with low 
credit scores, bankruptcy, self-employment, or loss of job will not 
prevent some from qualifying for a mortgage loan.

For more great information go to How to Get a Home Inspection.

Allow me to help you find the home of your dreams Contact Eddie Perez at (201) 344-2886, www.investhoboken.com.

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