FHA Loans vs. Conventional
FHA is the federal housing administration which is responsible for the government home loan insurance program. The FHA is probably most well known for their first time homebuyer program which makes less strict the typical requirements to be able to get into a home. The most popular of the FHA home loan is mortgage program which requires only 3% of the loan amount as a down payment and allows this 3% to be in the form of a “gift” or company payment or other method not requiring the funds to be “seasoned” in the case of some conventional loans.
FHA home loans are also defined by the limit on how much the loan can be. This amount is usually defined by the county and state in which the property is located. There may be differences of as much as $100,000+ depending on location. Your Salt Lake City mortgage broker should have some information on how much you can apply for. In the case of most first time homebuyers, the upper limit for an FHA home loan is usually plenty for the type of home that first time homebuyer can both afford and would take.
From a cost perspective, the FHA loan may be somewhat comparable to the traditional loans except as it relates to the down payment. The overall rates may be somewhat comparable but leaning towards the rates being slightly lower through an FHA. The FHA home mortgage also has the advantage that it can be transferred to another individual without the process of reapplying for a new loan. The loan is “transferable”.
There is also a program for refinancing as well as a cash out program. Both of these two are usually not associated with FHA, but are available through FHA programs. The FHA home loans also tend to be a lower cost loan for those who have struggled with bad credit or other adverse financial situations. So, they definitely have their place as to their usefulness for potential homeowners.
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[...] loan over $417,000. This has been modified slightly depending on the type of mortgage, such as an FHA mortgage and the location of the home. For instance in some areas in Salt Lake City, mortgages that are FHA [...]