FHA Mortgage Loans

The Federal Housing Authority in USA provides FHA mortgage loans and FHA mortgage loans had a very big share of the mortgage loan market in 2000 however their popularity has gone down. The reason for this is that the mortgage loan market is a very competitive market and when mortgage companies see that they are loosing their market share they will find means to counter the competitors so that they can retain their market share. People who do not have a good credit rating and cannot get a prime mortgage can get a FHA mortgage loan. One has to make a down payment of 3% for a FHA mortgage loan. There is a county wise upper limit to the mortgage amount that one can get. There is a mortgage insurance that one has to take with a FHA mortgage loan.

The FHA mortgage loan is a good option for those who don’t qualify for a prime mortgage but the requirement of paying 3% as a down payment and also a forced insurance is not so tempting. Especially since the zero down payment mortgage like the VA assisted and other mortgage lenders offer have come on the market. Also one does not have an optional ARM mortgage that one can take. One can get a 15 year or a 30 year or an ARM type of FHA mortgage loan. One can check the current FHA mortgage loan rate by visiting the FHA web site and use the FHA mortgage loan calculator to calculate the installments. There is no substantial difference in a prime mortgage interest rate and an FHA mortgage interest rate. There is another restriction on an FHA mortgage loan and that is the income to debt ratio which is 41% which is higher then what are the requirements for the other open market mortgages. The current interest rates for a FHA mortgage loan vary between 6 and 6.5%. One can get assistance from FHA to make the 3% down payment requirement through down payment assistance programs that are available through the FHA. The FHA mortgage loan program would gain in popularity if the 3% down payment restrictions were curtailed and the upper limit for borrowing is revised. A bill regarding removing the down payment requirement has been pending with congress since 2004.

Anyone who qualifies for an FHA mortgage loan does get access to a large variety of mortgage loans and there are no pre-payment penalties which is a major plus point. FHA home mortgage loan bad credit loan California refinance and FHA home mortgage loan California refinance are two popular home mortgage loans that are available in California. One can also get a VA FHA home mortgage loan if one is eligible by VA (Veterans Administration) this gives the member an edge as being a member of VA he or she does not have to pay the 3% down payment which is a pre-requisite of the FHA mortgage loan.

There are several mortgage companies that deal with FHA mortgage loans and one can easily look at the different mortgage companies that offer these mortgage loans. In some counties where there is a cap of 203K mortgage companies advertise FHA 203k mortgage loans.
If one does not have a good credit rating and wants to buy a house but cannot get a normal mortgage then it is a good idea to examine the possibilities of getting an FHA mortgage loan. The only catch is paying the 3% down payment however it is better to pay this then to pay a higher down payment to other mortgage companies who may accept a lower credit score. As they work the Loan to Value ratio with a person’s credit score so the lower the score the less mortgage loan they will get