Get Your Dream Home With Fha Loans

FHA stands for Federal Housing Administration. Their main objective is to promote ownership of houses at a very reasonable rate through FHA loans. It is a kind of reverse mortgage policy that they follow. In this the interested purchaser has to give a very small amount of down payment to claim ownership of the property. In case of FHA loans, the lender does not need to write off a loan if the borrower is at fault. It is the responsibility of FHA to pay back the loan. Due to this unique policy and assurance, many lenders are opting to offer this interesting mortgage policy.

The terms and conditions for availing FHA loans are also simple enough. Almost anybody and everybody can apply for a FHA loan. There is no restricted income limit in which you can borrow money; however there is a limitation on the amount of money that you can borrow as loan. Apart from this, you need to have a decent income to debt ratio. This is to ensure that you are capable of paying back the loan. Last but not the least; you have to provide evidence that your credit balance is decent.

There is a slight difference between FHA loans and reverse mortgage policies. Reverse mortgage is also popularly known as lifetime mortgage. This policy is mainly designed for the senior citizens in the country, who are 62 years of age or more. In this, no payment is made by the owner of the house to the lender and the total interest is accumulated and added to the valuation of the property. Every month the debt on the property increases if a lump sum amount is paid to the owner or if the owner gets monthly payments.

The conditions and criteria for availing FHA loans and reverse mortgage loans are almost similar. In the latter the age comes into factor. Only a senior person over the age of 62 years can opt for reverse mortgage loans. The home that is to be mortgaged should be one, which should be able to support a single family or should have 1-4 units. There are some homes that are built as per the requirements and eligibility criteria of the FHA so that it is easy to avail reverse mortgage with them.

The amount of money you can borrow as FHA loans or reverse mortgage loans depend on various factors. The present interest rate is one of the most important factors that decide the amount of money you can borrow as loan. Apart from that, the youngest borrowers age, the sales price of the home, the percentage of mortgage limit for the particular area, the initial percentage of Mortgage Insurance Premium (MIP) etc all decide the amount that can be borrowed against the reverse mortgage.

Reverse mortgage policies and FHA loans have been welcome by the senior citizens in the US. It provides them financial and social security. With the money, they can pay their regular bills, increasing medical expenses and can also support their old age all by themselves.