|
Northwest Equity Home Sales |
 |
|
|
FHA Financing The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made
by FHA-approved lenders throughout the United States and its territories. FHA insures
mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of
mortgages in the world, insuring over 34 million properties since its inception in 1934. What is FHA Mortgage Insurance? FHA mortgage insurance
provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. Loans
must meet certain requirements established by FHA to qualify for insurance. Why does FHA Mortgage Insurance exist? Unlike conventional
loans that adhere to strict underwriting guidelines, FHA-insured loans require very little cash investment to close a loan.
There is more flexibility in calculating household income and payment ratios. The cost of the mortgage insurance is passed
along to the homeowner and typically is included in the monthly payment. In most
cases, the insurance cost to the homeowner will drop off after five years or when the remaining balance on the loan is 78
percent of the value of the property -whichever is longer. FHA
|
|
|
|