With the increase in private mortgage insurance (PMI) rates, many homebuyers have been questioning whether an FHA loan is their best financing option. GVC Mortgage encourages Indianapolis homebuyers to consider each mortgage loan option before moving forward.
An FHA loan is not money lent directing from the Federal Housing Administration (FHA). What happens is that when you’re approved, the FHA insures your mortgage through a private lender. That insurance (PMI) becomes a safety net for the lender. Therefore, if you can’t make payments or have to default on the loan, the FHA then takes possession of the home and the payments (and will likely sell the property).
So if you’re considering an FHA loan, here are two benefits to homebuyers (originally posted by Mortgage Professional America [MPA]):
1. FHA loans are 100% insured.
Dave Hershman of MPA (Mortgage Professional America) notes, “Basically, there is less of a risk that a lender will take a loss on an FHA loan if they follow the rules and the loan goes into foreclosure.”
2. FHA loans generally require little-to-no down payment.
Many homebuyers find the FHA loan attractive if they don’t have a large enough down payment for a conventional loan. An FHA loan may charge for the insurance, but you may be more likely to get an FHA loan if you don’t have enough cash for the down payment.
Ask your mortgage broker about the different types of FHA loan options: FHA 203(b), FHA/HUD 100, and FHA 203(k). If you’re looking for a mortgage loan in the Indianapolis or Carmel area, consider GVC Mortgage.
Founded in 1996, GVC Mortgage has proven itself to be a reliable and professional mortgage company to Indiana homebuyers. The GVC Mortgage staff takes great pride in helping individuals become homeowners and works hard to maintain rapport throughout the entire mortgage loan process. Whether you have questions about an FHA loan, conventional loan, or want to know your refinancing options, contact GVC Mortgage at 317-564-4906.