Day: November 20, 2017

FHA Mortgages

FHA mortgages are the most common type of mortgage. See if this type of mortgage is right for you

Moving on in our series, one of the most popular and most recognizable is the FHA mortgage. This type of loan is obtained from a regular institutional lender, such as a bank or credit union. The lender is insured against loss on the loan by the Federal Housing Administration (FHA). An (FHA) loan can be a fixed-rate mortgage or an adjustable rate mortgage.

Advantages: If you have sufficient income to make mortgage payments, you can get an FHA loan for anywhere from 95%-97% of a homes cost. And, with a fixed-rate FHA loan, your home may be–

  • Much easier to sell at a big profit: FHA loans are assumable. So, if interest rates are way above your mortgage interest rate when you sell your home, any buyer who assumes your loan, automatically gets a big bargain. As a result, you can charge a premium price for your home

Disadvantages: You pay premium for the FHA mortgage insurance. Also, it takes just a little bit longer to get an FHA loan than it does a conventional loan.

 

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