FHA loans are the most common types of loan. “FHA” stands for Federal Housing Administration, which insures FHA loans. The federal government insures loans through the approved lenders in order to reduce the risk of a loss to the lender in the case of a homeowner defaulting on their mortgage. Mortgage insurance premiums are part of this protection.
Through this system, borrowers pay an upfront fee and a monthly premium. Generally, the mortgage insurance stays in place for the life of the loan. By having these standards and this protection, the FHA is able to lend to borrowers with lower credit scores, and with options for low down payments.
There’s a maximum limit to what you can borrow for an FHA loan, and how much you can borrow depends on the county in which your potential home is located.
To look up the current FHA or GSE mortgage limits for your area, click here!
When you are ready to purchase a home, give Dream Home Lending a call! We would love to help you achieve your dream of homeowership.
