FHA Home Loans

FHA Loans are insured by the federal government so a private lender is taking less risk when they provide loans to people with lower credit scores. This is also true of Veteran Affairs (VA) Loans.

Private lenders include your local credit union and other financial institutions. Most lenders offer FHA Loans and Veteran Affairs Loans, but it’s a good idea to check as some lenders may offer only the standard type of mortgage known as a Conventional Loan.

With a Conventional Loan, your lender is taking on all the risk in case you can’t pay. For this reason, most conventional loans will require a certain credit score to qualify.

If you get a Conventional Loan, you can usually choose if you want fixed-rate or adjustable-rate interest, choose your term, and choose whether or not to get a home inspection. Your lender may or may not ask you to get your home appraised to check that the purchase price matches the market valuation.

With an FHA or VA loan, there’s a checklist of appraisal requirements that your house must meet in order for you to be approved for the loan.

Your FHA home loan comes with a term of 15 or 30 years. An extended term means lower monthly payments so you can easily manage your budget.

Yes, it does. The benefit of a fixed-rate mortgage is that you’ll pay the same interest rate throughout the life of your loan, so you’ll always know what you owe each month. Your rates won’t be left vulnerable to changes in the market.

Keep in mind that If market rates fall below your fixed rate in the future and your credit score has improved, you may be able to do a home loan refinance and get a lower rate.

To make your payment the same from month to month, the interest you pay is spread out equally over your term. This means that in the beginning of your term, you’ll pay more toward interest and less toward principal. Later in your term, you’ll pay less toward interest and more towards the principal.