FHA Lenders

- Anita Johnston

When you begin your quest for finding a home you are sure to hear such words as FHA, HUD, VA, and many, many more when it comes to describing home loans that are backed by the United States government. You may have so much information on the various types of loans swirling around in your head that you may feel dizzy, disoriented and above all very confused when it comes to trying to learn which one is best for you.

Okay to begin with you should know upfront that FHA does not give money to you for a home loan. What they do is promise a certain amount of money to the lending company in case you default on the loan.

Today, many lending companies are approved to work with individuals to aid them in receiving FHA loans especially if they are not able to obtain conventional loans because of bad credit or no credit.

Now, the question comes into play, should I go through a FHA lender to purchase a home? The answer is really quite simple. If you do not have bad credit, yes, they can help you receive a FHA loan. If you are just starting out and have no credit, yes, they can help you receive a FHA loan. If you do not have 20 percent to put down for a down payment, yes, they can help you receive a FHA loan. However, they a FHA lender can only do so much, you must first qualify for the loan. In many cases, you can qualify for a FHA loan, even if other private sector loan companies turned you down. The best part of receiving a FHA home loan is that the risk of lending you money is not placed on the lending company that is giving you the loan but on the FHA.

When you start your search for lender’s that offer FHA loans you will find there are several that offer this option. Now, you will be glad to learn that with an FHA backed loan the down payment can be as low as 3 percent of the homes value instead of sometimes up to 20 percent down according to your credit. Another great option is that the FHA can ask the seller to pay for part of the closing costs and the rest of the closing that you would normally have to pay be included with the home loan. In addition, you will not be required to have private mortgage insurance. All of these items can really save you money in the long run or in the very beginning so you do not need as much cash upfront to purchase a home.

Once you find a lender that you feel comfortable with, be sure to discuss with them the options you have with an FHA loan and learn how much experience they have apply for the program, etc…