This is a question that many people ask and the difficult part is the answer. The fact is, there is not one "type" of person that the FHA home loan is for. This type of loan has been around for longer than most people realize, in fact it has been around since 1934. The loan was introduced during a very difficult time for our country, the Great Depression. During this time homes were not selling, foreclosures were up, and home construction was at a standstill. Many people had lost all of their money and the federal government needed to provide assistance if they wanted to change anything, and so came the FHA insured loans that would provide borrowers with low cost loans and insurance for the lender.
The FHA home loan Recipient
It's hard to say who the FHA insured loan is for because to date more than 30 million homes have been purchased with this type of loan! That's right, 30 million, so it's hard to put a face or a stereo type to those that take advantage of this type of loan. While it is hard to say that this loan program is for one specific demographic, it can be said that these loans are generally offered or thought of as a great option for those that fall into the low and middle income brackets. While it is often these people who find these loans most appealing, there are others who are buying homes that are worth more than $700,000 with these loans!
The reason that this is often a great loan option for those that fall into these categories is because the down payment required is usually very small, about three percent. When you are in the low and middle income brackets you need for the down payment to be as affordable as possible so that it can match your income, and therefore it stands to reason that these people would find an FHA home loan the most accommodating.
In addition to low down payment requirements this sort of loan is also very fitting for people in these income brackets. That is because the interest rates are generally quiet low and there are programs that will allow for closing costs and down payments to be paid for so the borrower can get into the home for very little or even nothing out of pocket. If you had unlimited income or funds you wouldn't need to worry about this sort of thing, but when you live on a budget and you could benefit from these programs, it makes sense to apply for an FHA home loan.
So, who is the FHA home loan for? It's for anyone who would like a smaller down payment, a lower interest rate, and those that could benefit from programs that will reduce or the eliminate the down payment as well as the closing costs. There are millions of people out there who have found that this is a great option for them to buy a home and experience home ownership for the first time in their lives. When you choose a mortgage broker or lender you can talk to them about whether or not you would be a good candidate for one of these loans. You may be surprised, when you finance with one of these loans, how affordable buying a home really can be.
By : IC
