San Diego, CA (PRWEB) June 18, 2013
LoanLove.com is a trusted destination for current mortgage news and expert loan advice. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals. The website offers a number of great informational articles and online tools and resources that can help borrowers to find the best California home loans available. A recently posted guide gives information on FHA loans California home buyers will want to know about when searching for the best home loan options.
The Loan Love article explains: “If you have good credit (not necessarily perfect), an FHA mortgage could be your ticket to home ownership. An FHA mortgage is a mortgage that’s been guaranteed (i.e., insured) by the Federal Housing Administration. The actual loan is made by a bank or other traditional mortgage lender, but FHA underwriting means the lender won’t be left on the hook if the borrower defaults.” Because the loan is insured by the Federal Housing Administration, FHA loans are very popular with lenders. However, there are also many benefits for the borrower.
Probably the biggest and most obvious benefit of FHA loans is that the borrower will not have to have a large down payment to buy a home. With FHA backing, lenders are willing to assume a larger mortgaged amount, meaning the home buyer might only need a down payment of as little as about 3.5%. This is great news for first time home buyers or those with lower incomes. The lower down payment means that interest rates can be a bit higher, however. This is something that the borrower will need to take into account, as borrowers with very good credit ratings may find much better rates with conventional loans.
This being said, the low down payment is still a great benefit that has attracted many California home buyers to take this loan option into consideration when looking for the best home loan options. Another benefit of this type of loan is that many FHA loans are assumable, which means that down the road, a buyer might be able to take over the mortgage without having to qualify for another loan product – and that can offer a real advantage if the homeowner decides to sell their home in the future.
In addition, FHA 203K loans allow buyers to take out a single loan to fund both the purchase of the house and home improvement, a very convenient and attractive option to many borrowers who do not want the hassle of applying for additional loans to fix up the house they are buying. These are some of the advantages of an FHA loan California home buyers should definitely take into account when searching for a new home. For more information on this and other loan options, and to view the full article that gives advice on when it might not be advisable to apply for an FHA loan, visit Loan Love at http://loanlove.com.