What Should I Know About FHA Loans if I'm Thinking About Buying a Home?

March 1, 2015

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA) that offers favorable terms for those who qualify, particularly first-time homebuyers.  Here are some important details:


1.      Is mortgage insurance required?  Yes.  Because only 3.5% of the purchase price is required as a down payment, FHA loans require you to pay private mortgage insurance.  This protects the lender from a loss if the borrower defaults on the loan.


2.      Can you use gift monies with FHA loans?  Yes, you may use a gift from a friend or relative for the 3.5% FHA down payment.


3.      Do I get the loan directly from the FHA?  No.  You need to get your loan through an FHA-approved lender.  Costs, services, and underwriting standards vary, so it’s important to shop around.


4.      How do I find an FHA-approved lender?  Go to the Department of Housing and Urban Development site at www.hud.gov (then search for “Lender List”), or ask me and I’ll refer you to a lender.


Do you have a real estate question you want answered?  Feel free to call us at 504-780-9422 or email Info@TheBirdsongRealtyGroup.com.  Perhaps we will feature it in our next blog entry!

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