Recently the FHA home loan has become very popular again, though it hadn't been as popular in recent years as it once was. Perhaps a lot of the popularity of this type of loan is on the part of the lenders because they are looking for as much security when lending as possible and with the FHA they are getting the principal amount of the loan insured against default. But, this type of loan is popular among borrowers who are looking for the best deal for them.
The FHA home loan is Appealing
There is no doubt about it; the FHA home loan is appealing to large numbers of people because it offers people who would not be able to buy a home with a conventional loan the ability to buy. What many people learn is that they are able to buy when they only have to come up with three percent of the purchase price of the home instead of up to 15 or 20 percent of the purchase price with conventional loans as a down payment. This allows for what once seemed like an unattainable goal of home ownership to become a reality.
In addition, to having lower down payments on the FHA home loan there is also the added benefit of lower interest rates. When you are applying for home loans you have to consider the interest rate because the interest rate will determine, in many cases, how affordable the loan will continue to be for you over time. With a low down payment and lower interest rates, people are able to afford a home even when it would not be possible with a conventional loan.
The FHA home loan is also appealing because on top of everything that has been mentioned thus far, there are also many programs that one can apply for or utilize that will help them pay for closing costs as well as a down payment. With these programs many people are able to move into a new home with little or nothing out of pocket. This would be helpful to anyone, but especially those whose finances have always held them back from buying a home in the past. Getting help with these costs can save a person thousands of dollars, and who doesn't want to save thousands of dollars when the opportunity presents itself?
When you look at an FHA insured loan in this way you can clearly see why this type of loan is so popular again. These loans originated during the Great Depression when people had lost most, if not all, of their money and they were often not able to keep their homes and they certainly couldn't think about buying a home. These loans have continued to be popular for those in all income brackets, but especially those in the low to moderate-income brackets throughout the United States. With the recent changes in the economy and the fall out of the subprime mortgages everyone is looking for the best deal, including the lenders, and with these loans they are provided with some much needed security from default, so everyone wins! Whether you are buying your first home or not, this may be a great loan option for you to consider because there are so many benefits.
By : IC
