Benefiting from FHA mortgage insurance plans
Article by Mortgage Guru
FHA mortgage insurance, an insurance policy provided by the Federal Housing Administration is an insurance plan designed to protect home mortgage lenders in case the home owners do not abide by or comply with the mortgage payment requirements. The FHA mortgage insurance offers many benefits to its homebuyers such as offering a down payment as low as 3.5% of the total cost of the house. It is also noteworthy that if a home loan is insured by FHA, it becomes easier for a borrower to qualify. This type of private mortgage insurance has helped many Americans make their dreams of purchasing a new home become a reality. Their feature to allow homebuyers to purchase homes with extremely low down payments enables virtually anyone to purchase a home within their income brackets without having to fork out huge amounts of cash upfront first for the down payment. It is an additional insurance that you will be required to buy when in the process of purchasing your new home. Mortgage insurance is something that is important for any home owner to obtain. Insurance on the whole is crucial to serve as a protection in case of any unforeseen circumstances or emergencies. Mortgage insurance is unique in the sense that it aims to protect your home from any unforeseen danger or damage that might occur to your home. This is especially crucial for those who own homes in areas which are prone to natural disasters. Imagine the devastation and financial impact you might have to suffer if your home gets destroyed in a natural disaster midway through paying up your mortgage. Without any insurance protection, all the money that you would have paid all those years would have been for nothing and on top of it you will not get any sum of money to help you relocate or find a temporary home. It is almost crucial to have a mortgage insurance for all home owners to avoid such situations from happening to them. Natural disasters and sudden unforeseen circumstances are events that we do not plan for and thus should have the necessary protection that we may require in time of need. Refinance FHA loans are loans that are insured by the Federal Housing Administration and made by FHA lenders across America. These loans are intended to help those from the lower income brackets to be able to purchase homes with a very minimal down payment requirement. FHA refinance loans have less strict eligibility criteria for those who apply and tend to be tad more flexible in nature. There are however a few guidelines that must be met by the applicants. These are as follows:? The borrower must meet FHA credit qualifications set. ? He or she must have sufficient income to cover the loan and other debt commitments. ? He or she should have a valid social security number.? The borrower is eligible for about 96.5% financing. The borrower will be responsible to pay an annual premium. ? The properties eligible will be one to four unit structures. ? A process of verification will be done on income, assets, liabilities and past credit payment history to get a better picture. Refinancing of homes is a big financial step and should be done after giving the decision much thought and analysis. It is also important to bear in mind to do it for the right reasons.
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