FHA Home Loans

The FHA or Federal Housing Administration has made it easier for people to be able to afford their own homes. This has changed the lives of literally thousands of American citizens who would otherwise not have been able to afford a house of their own. Not only does it give them a house of their dreams but raises them from the rental market into property owners for the first time. In many cases, it can be the first time a family has ever owned a house of any kind. The government guarantees and backs these loans so the lenders do not miss out if there are any defaults on the payments.

The FHA home loans allow people on low incomes to be able to afford a deposit down payment. Usually this is around 20 per cent of the purchase price, but with the FHA loan, it is more affordable at around 3%. In fact, it is not unheard of for a 100% home loan to be obtained via the FHA government home loan scheme.

Refinancing with FHA
If you already have a mortgage then there is also the possibility of refinancing with a federal housing administration loan. This can significantly reduce a mortgage interest repayment. This lower premium means that an individual has more money in his pocket available for essential repairs. Refinancing in this way will not release any capital as only the total amount of the original loan can be refinanced. However, it will reduce the interest repayment significantly particularly as interest rates have reduced in recent times.

Is it easy to get a FHA loan?
Although FHA loans may sound like a godsend for many people, they can be quite difficult to get and they may also only be applicable in certain areas and to certain people. Although they are extremely helpful to those aspiring to own their own home for the first time, they exist primarily to help lending institutions so they do not lose out against default payments. With FHA backed loans, if you pay your mortgage, the bank gets paid and if you default on any payments the bank also gets paid so it is no surprise that most lenders are trying to get this insurance from the government wherever it can. Clearly, the FHA does not have a never ending pot of money so there are certain criteria to be followed before the mortgage can be agreed.

Help to prevent foreclosure
Not only can FHA loans help with obtaining a house but they can also help an individual facing financial difficulty with mortgage repayments. Anyone can apply fro refinancing their current home loan in favor of a FHA loan with lower rates. This can really make a difference to some households and can even mean the difference between being able to continue living in their home and having to leave it or have it taken through foreclosure or repossession. The FHA will require a deposit or down payment for the refinance but there are organizations available that can help what that too if you are not able to afford it.

Basically, FHA is less stringent with credit history when considering lending so it always worth approaching them if you are in difficulties with mortgage repayment as in all likelihood, they may be able to help with the refinance. As always, get specialist advice before embarking on any course of action. Even when things seem dire, there is always a solution. Do not feel afraid or embarrassed to speak to brokers or specialists. There are so many people that the current climate has affected and many have been helped in situations that yielded positive results.