FHA & VA Mortgage Loans
FHA mortgages are loans insured by the Federal Housing Administration (FHA), which is a federal agency in the U.S. Department of Housing and Urban Development (HUD). The FHA doesn’t take part in the actual loan process, however it does determine the loan guidelines and provide the mortgage insurance that all lenders require to make these types of mortgages. Mortgage insurance is paid initially in the form of an upfront mortgage insurance premium, which is usually financed, then as a monthly premium that is added to the mortgage payment and based on a percentage of the initial loan amount.
FHA loans allow for as little as little as 3.5% down, all of which can be gift money, on the purchase of an owner occupied 1 to 4 unit residence. Qualified homeowners can borrow up to 97.75% of their home’s value on refinance transactions. FHA mortgages often carry the best available interest rates but always require both upfront and monthly mortgage insurance for terms longer than 15 years.
VA Loans, also called Department of Veterans Affairs home loans, are available to veterans, active service members, National Guard, reservists, and spouses.
Whether you’re starting out with your first home or looking to save money by refinancing your current mortgage, Local Rate 411’s lender matching service can help you sort through the process and take advantage of your military benefits.
All VA Loans are backed by the U.S. Government through a VA Entitlement. This Entitlement makes it easier for you to qualify for a loan because it represents the amount that the government would pay to the lender if you defaulted – it’s like government-sponsored loan insurance that you get automatically for dedicating your service to our country. You can use it for refinancing you current mortgage or purchasing a new home.
Also Read: How To Streamline Your FHA Mortgage
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