Based on the U.S. Department of Housing and Urban Development, FHA which stands for Federal Housing Administration, has been issued since 1934 and started catering services to buyers. The goal of creating the FHA is to protect lenders against losses so they have chances to encourage more banks to lend money to consumers. The FHA has insured over 34 million home mortgages by the year 2006. Aside from protecting lenders from losses, FHA loan services like NJ FHA, give opportunities to buyers to lend money as additional income for their investments. As a matter of fact, there are lots of advantages in applying FHA loan if you are planning to get a house or invest a business. To know more about the benefits of applying FHA loan, below are the following advantages:
Unlike other loaning services, FHA is the only loaning service that allows down payments. Moreover, this loan service allows closing costs to be borrowed and even received as gifts from family and friends or other third party, who can pay the closing costs of the loan. The only drawback here is, closing costs can be higher depending on the situation, than other home mortgage loan. Compare to other mortgage services and loan services, FHA loan interest is lower. It is advisable for home buyers seek all possible options, including the conventional loan, and check every option feature in order to find what would be the best loan service for them. It is also important to review the interest rates of every loan service. Try to balance and weight the pros and cons of every loan service before applying. FHA loans don’t have financial penalty to prepayment of loans. FHA loan underwriting guidelines are not as strict like the other home loans. However, home buyers with a shorter credit history and even those who have credit problems will face problems and may take time to get an FHA-insured loan.
When it comes to insuring loans, the FHA charges a mortgage insurance premium, and sometimes, this insurance can be financed into the loan, and even annual renewal premium can be charged too. The result, your monthly mortgage payment gets higher. Here are the advantages of the FHA. However, some advantages may find difficult to some buyers who have no good records when it comes to payment. The only key to avoid such problems is to pay on time. In order to pay on time, you should mark the calendar which dated for the payment so you have a cue for the preparations of your payment.
FHA Allows Down Payment For First Timer Borrower FHA loans, especially the NJ FHA, attract many home buyers, especially those who have a few savings in their banks. Since the FHA allows down payment, borrowers are required to pay 3 percent on the given dates. It is a downside for borrowers who have no excellent credit. Lenders check the credit history and they allow borrowers who have a good history in payment. So it is advisable to pay on time for this loaning service allows down payment.