There are lots of loan products out there and it can be difficult to determine which may be best for your situation a good loan officer can help navigate through that choice. Today we have one of the best, Dan Hubrich, here to tell us about FHA loans to see if this may be the direction to take for you.

Let’s talk about FHA loans this month. FHA stands for Federal Housing Administration. The FHA doesn’t actually lend any money, but it’s job is to insure loans to lenders. The way it does that is by collecting mortgage insurance premiums. If a loan goes into default, the lender can file a claim and they are protected in the event of a foreclosure. FHA is a lot more lenient to help borrowers qualify for a home loan. They will allow lower credit scores, higher debt ratios, and shorter times from negative credit events such as bankruptcy, short sales, foreclosures, etc. Interest rates are also generally a little bit lower with FHA loans and you do not have to be a first time buyer. So really the only downside with FHA loans are slightly higher fees. They charge a 1.75% upfront mortgage insurance premium which gets added to the back of the loan. In addition to that, FHA loans have monthly mortgage insurance as well which is in most cases .85% of the loan balance due per year. Let me know if you have additional questions and I’d be happy to answer them.