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An FHA Loan Can Help Low-income Families

An FHA Loan-

An FHA Loan through the Federal Housing Administration, can help low-income families purchase homes they would otherwise be unable to afford. This is a big help to families who require more than a single bedroom apartment or house but don’t have the income to come up with a downpayment and may be required to pay higher interest rates and thus a higher monthly mortgage payment. The FHA loan is a government sponsored insurance method that can lower your monthly mortgage payment provided the lender is an approved FHA lender.

5 other benefits to an FHA loan

1. FHA Loans have a Low Down Payment

FHA LoansThe FHA loan can help reduce the down payment needed in order to secure a home. This helps the low-income family get into a home they need without having the entire amount. Many families struggle to put food on the table and gas in the car without having to worry about the amount of money needed for the down payment.

2. FHA Loans have Low Interest Rates

Even those who suffer from credit problems can receive the same interest rates others do when using the FHA loan. Families that have a less than ideal credit rating can still get affordable rates through FHA mortgages. Sometimes the interest rate may be increased due to credit risk, but the rate will still be lower than without the backing of the FHA.

3. FHA Loans Allow the Down Payment to be Gifted

As opposed to conventional mortgage loans, the FHA loan allows up to the whole down payment to be paid for by a relative or employer. There doesn’t need to be a financial reserve or sourced monies for two months with the FHA loan. This helps get low-income families into the home they need with less hassle of finding the money for the down payment.

4. FHA Loans Allow a Co-borrower

When applying for the FHA loan, a non-occupant of the home in question can become a co-borrower for the loan. Currently, no other mortgage option allows this. A family seeking the FHA loan can get assistance in the form of a co-borrower from a friend, family member, or employer in order to increase the potential of the loan.

5. FHA Loans have Protection

The FHA loan is an insured loan from the FHA. This means you have greater protection from foreclosures should you happen to miss a payment. This can help fortify your position and help keep your home when other mortgage handlers would start foreclosure proceedings.

An FHA Loan can help you get into a house when you otherwise wouldn’t be able to. And these days with home prices down it is often cheaper to buy a house than to rent one. So if you are thought you couldn’t afford a home look into the possibility of an FHA loan.

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Author Bio:

Jason Miner an expert freelance writer loves writing articles on different categories. He is approaching different bloggers to recognize each other’s efforts through “www.blogcarnival.com”. He can be contacted through e-mail at jasonminer8atgmaildotcom.

 

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