FHA mortgages are a type of government backed home loan. While FHA mortgage loans have been around for some time, the program was recently expanded to include FHASecure loan offerings to assist homeowners with adjustable rate mortgages that they can no longer afford. Here is the basic definition of FHA Mortgage Loans.
FHA Mortgage Loans are government home loans that meet underwriting guidelines set by the Federal Housing administration and are backed by Ginnie Mae. These loans were originally intended for low income individuals without a down payment.
Before the credit meltdown FHA mortgages were become less popular and members of congress were even discussing scrapping the program due to low interest rates and the ease of qualifying for traditional mortgage loans. Now with all of the trouble in the mortgage industry FHA mortgages are back in vogue for borrowers with marginal credit and low income. The downside of an FHA home loan is that they require a three percent down payment and you will be required to purchase Private Mortgage Insurance, which will raise your monthly payment.
Just because you qualify for an FHA backed mortgage loan don’t think you’re protected from shady lenders and mortgage brokers. In fact, the Private Mortgage Insurance included with your FHA mortgage loan only protects the lender from losses if you default on the loan. There is no protection for you from junk fees and commission based markup of your mortgage rate! The only way to protect yourself from paying too much with your FHA mortgage loan is to do your homework and find the right person to originate your loan.
You can learn more about finding the right mortgage broker to arrange your FHA home loan without paying junk fees and the hidden markup known as Yield Spread Premium by registering for the free mortgage videos found on this website. Register today, the videos are yours free with no obligation.