The Federal Housing Administration (FHA) has several programs to help folks with homeownership. An FHA loan is a loan insured against default by the government. Because of this guarantee, lenders in this day and time are more interested in making FHA loans than ever!
FHA loans are not for everybody. However, they are great loans for the right people. FHA charges borrowers an upfront mortgage insurance premium (MIP) equal to 2.25% of the loan, and they add this to the loan amount (As of 6.14.2010). Meaning that if your BASE loan is $100,000 then your TOTAL loan (what your payments are based on) is $102,250. This upfront MIP (sometimes referred to as UFMIP) is refunded by a complicated schedule if you sell the property or refinance during the first 7 years.
With the exception of condominiums, FHA also charges a monthly MIP on loans. Condominiums are ALSO charged monthly MIP. If a borrower defaults on their mortgage, FHA uses the collected insurance premium to pay off the mortgage.
For more information on FHA’s version of PMI, click here.
To get Prequalifed for a FHA Loan please call Steve and Eleanor Thorne, in Cary NC, Corporate Investors Mortgage Group, 919-649-5058
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