What is a FHA Mortgage?

Want to become a homeowner, but you're not sure if your current finances will let you qualify for a mortgage? A FHA mortgage could be your solution! But what exactly is a FHA home loan?

This mortgage option is run by the Federal Housing Administration (FHA) to make it easier for home buyers to qualify for a loan, whether it's a purchase or refinance. That means, you'll be able to qualify with a smaller down payment (as low as 3.5%) and less-than-perfect credit score!

What's So Great About FHA Loans?
o You can buy a home with a down payment as small as 3.5%, a much lower down payment than conventional loans offer.
o You can use gifts for down payments and closing costs.
o There are no prepayment penalties (this is big for subprime borrowers).
o Your FHA mortgage may be allowed to be taken over by another person if you choose.
o You may receive leniency if you stumble across hard financial times while paying your mortgage.
o You can fund for home improvements with a FHA 203K program.

Why Shouldn't I Get a FHA Loan?
o There are limits to how much you can borrow with FHA mortgages, so you may not get all the money you need if you're looking to get a large loan.
o The upfront mortgage insurance premium may cost more than private mortgage insurance.

https://entp.hud.gov/idapp/html/hicostlook.cfm