What is FHA mortgage? How can FHA mortgage help you buy a home in Los Angeles?

FHA Mortgage is the loan which is backed by government with more flexible lending requirements. Since it is more flexible than the conventional loans, the interest rate for the FHA mortgage can be pretty higher. As the buyer, you may be needed to pay insurance premiums or monthly mortgages along with the loan payments. It may be either available with a fixed rate or adjustable rates. The loans are in fact insured by the FHA or the Federal Housing Administration. The qualification process can be easy as the down payment or the credit requirement is far less stringent than the conventional mortgage. FHA Mortgage Los Angeles can assist you in buying a new home in Los Angeles. If you have not managed to save enough money for your new home, consider FHA mortgage.

Who should go for FHA Mortgage?

Recent college graduates looking to pursue higher education or newlyweds willing to buy a new home but lack adequate resources can opt for this kind of loan. Anyone whose credit is marred by foreclosure or bankruptcy may qualify for the loan. It is a real boon to the low wage earners and those individuals who have a bad credit score. You can realize your dream of buying a new home with the mortgage loan. Now there is no fear of loan approval rejection from the banking institution. Previously, the very aim of FHA was to offer financial assistance to individuals who were not eligible for applying for the loans or did not possess the prerequisites for filling the loan application form. With this loan scheme, now more and more individuals are getting motivated to buy new homes.

The eligibility criteria for the FHA mortgage

The eligibility needs are very much basic and are as follows:

• He must be the resident of USA and should be of the needed age
• The lender verifies whether you qualify for the loan or not. He will check out the debt load, the income and the assets.
• You need to produce your past credit scores to help determine the rate of interest.
• There must be a valid social security number.

Besides the above mentioned criteria, you are also supposed to make 3% down payment in order to take the loan. The payment may be in the form of a gift or cash transaction. Compared to the conventional loans, FHA is the low cost down payment loan which makes is affordable for the first time borrowers. You can find a broker who can help arrive at the lender.

FHA mortgage insurance

FHA offers mortgage insurance on loans facilitated by the FHA approved lenders. FHA mortgage insurance offers the lenders with the protection against losses on the occasion of default by the buyers. Since FHA pays the claim, the borrower has to undergo less risk. The loan must however meet certain requirements stated by the FHA for insurance.

If you are inclined to collect more information on the same, you can visit the official link Bill Rayman Home Mortgages.

About the Author:

The author of this article has an extensive knowledge in the field of Mortgage Los Angeles.