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