Getting an FHA mortgage loan is also referred to as a Federal Housing Association loan. The federal housing association is run under the housing urban development and is solely responsible for the administration of the government home loan insurance program. It helps people who might not otherwise qualify for a mortgage loan to get one because the FHA gets rid of the risk to the lender by 'vouching' for the applicant. The current popular mortgage loan from the FHA right now is the 203 mortgage loan program because it only requires 3% from the borrower and gives 100% of the money that is needed in order to close on the house and allows it to be a gift from a friend, family member, non-profit organization, and government agency. The main reason getting an FHA loan is a good idea is that the credit needs that you will be required to fulfill are not as strict as they are with the FNMA or FHLMC. Someone who may have had credit problems should not have a problem getting an FHA loan. Also, FHA mortgages allow you to take over the mortgage without the added cost of having to get a new loan. It certainly makes getting a home a lot easier. Of course, the seller has to pay for part of the traditional closing costs while a borrower's allowable costs can partially be wrapped into the loan. Another thing that makes an FHA loan so worthwhile is that 100% of the down payment and closing costs can be considered a gift without any penalties or tax problems. The biggest disadvantage of getting an FHA mortgage loan is that it will have to be the upfront mortgage insurance premium (MIP). What this means is that on a 30 or 15 year FHA home loan that pretty much adds up to approximately 1.50% of the loan amount in addition to the 0.5% annual renewal premium that a borrower will pay during the paying time of the loan. In addition, FHA limits the amount of money that a borrower can ask for so it is best if you are planning to take this mortgage loan road, that you first check for the right FHA loan provider and then search for your home.
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