An FHA loan is almost as good as a VA or USDA loan. It carries an insurance premium that you pay that insures the lender carrying the paper against your potential default. These premium payments wind up in Atlanta and are disbursed as need be when various FHA loans are foreclosed on about the country.
Your mortgage pro, experienced in FHA loans, can explain the workings of it to you. FHA allows you to purchase with as little as 3% down payment. This money doesn't even have to come from you, it can be from a down-payment assistance program or other sources, ( not the seller).
Your FHA loan will not carry any kind of interest penalty for paying it off early, or before a specified time period. There are specific HUD guidelines that are adhered to and it is not unusual to be asked at a later date by a HUD official if everything was "done legally in your loan process."
In this time we're now experiencing, government type loans will become the choice of the day. One thing to realize about government type lending programs is that they all have their pluses and minuses, but over-all, they are geared toward the consumer, and it's pretty hard to get hurt by them unless there is outright fraud involved at the outset.
· 1 decade ago