FHA Loans

FHA Loans San Diego

Express Funding Mortgage Company is here to assist with your FHA Loan needs.

For people who have low to moderate income yet desire to have their own house, a Federal Housing Administration (FHA) insured loan is well-suited for them. FHA loan is a program subsidized by the government which is intended to provide for low income borrowers in order to purchase their own home. This program began in the 1930s during the Great Depression under Franklin Delano Roosevelt. It went on to become part of the Department of Housing and Urban Development’s Office of Housing. It was observed that the rate of foreclosure and defaults ascended abruptly. That’s why the FHA loan was implemented to provide lenders some sort of insurance.

FHA loan assures to the lenders that once default of loan happens, FHA will provide a safety net to pay it through insurance premiums. Because of this, lenders feel more secure to have transactions involving large mortgage loans.

Originally, FHA loan was a program aimed to make the loan self-supporting, based on the insurance premiums paid by the borrowers. However, FHA loan eventually became a type of loan assisting people who don’t have the capability to purchase a conventional home. It is because FHA loan offers lower down payment requirements. In fact, it grants to the borrowers 97% of value of the amount of the house. The other 3% of the amount can be presented into a gift or grant.

Because it doesn’t require any income-limit, FHA loan can be available to anyone. A person only needs to have a decent income and credit in order to be qualified to get a FHA loan. To apply for this type of loan, a person requires to contact several lenders to inquire if they originate FHA loans. Rates and terms of each lender are truly different, that’s why it is essential for a borrower to compare the pros and cons of the prospective lenders. Then, the lender will make its own assessment on the borrower’s debt to income ratio in order to gauge the person’s capability on meeting the monthly home payment. Once the lenders have determined the borrower’s ability, they will decide on whether to provide a loan to them or not.

In addition, a borrower should be aware that there are reasonable and customary fees such as appraisal fees, inspection fees, credit report fees, document preparation fees and other charges which are legally charged to them depending on the kind of home loan. That’s why a borrower needs to ask from the lender upon what fees they implement in order to prevent any illegal and unnecessary fees. Because of its unique features, FHA loans have became popular with first-time buyers.

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