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    Email: Info@Advocate-Lending.com

  • Federal Housing Administration

  • The FHA home loan is directed toward borrowers who may have difficulty meeting the requirements of a conventional mortgage. The down payment may be as little as a 3.5% the purchase price.  The primary drawback of an FHA loan is that for down payments less than 20% the borrower pays mortgage insurance.  There is an upfront fee paid paid at closing and monthly mortgage insurance payments based upon the unpaid balance.  If the loan-to-value is less than 90%, the monthly mortgage insurance payments will terminate after 11 years.  Otherwise, the monthly mortgage insurance payments extend through the life of the loan.  This means that at some point in the future, it might be wise to refinance to not have the additional expense of the monthly mortgage insurance payments.

    Not only does the borrower have to qualify but the property also has to meet more stringent qualifications than for other other loan types.