FHA Mortgages and Home Inspection Requirements
From LoveToKnow Mortgage
Thinking about getting an FHA home loan? If so, you need to learn as much as you can about FHA mortgages and home inspection requirements before you begin the process.
About FHA Mortgages and Home Inspection Requirements
The Federal Housing Administration (FHA) was created in 1934 to allow more Americans to achieve the dream of homeownership. Since their inception, FHA mortgages have enabled Americans to purchase homes at a rate that is incomparable to any other country in the world. If you are considering an FHA mortgage, you will need to study up on FHA mortgages and home inspection requirements.
FHA Mortgages
FHA does not give loans directly. Instead, they assist bowers in getting a loan and insure the loan to make lenders more comfortable. This makes it much easier to qualify for a conventional mortgage. Lenders know that if you default on the loan, they will receive some form of payment from FHA.
FHA mortgages are perfect for people who have less than perfect credit. If you do not qualify for a conventional loan because of your credit history or lack of it, you may qualify for an FHA loan. There are also several programs specifically designed for low to moderate-income families. With these FHA loan programs, borrowers can take advantage of low interest rates and low monthly payments. Down payment requirements are also kept to a minimum. In most cases, borrowers pay only 3% at closing or wrap their closing costs into the mortgage.
To qualify for an FHA mortgage, borrowers must:
- Have a positive credit history spanning the last two years.
- Show consistent or increasing income.
- Have a steady employment record (two years or more with the same employer is perfect).
- Have no bankruptcies in the last two years.
- Keep the mortgage payment at approximately 30% of their gross income or less.
To learn more about FHA mortgages and to estimate your monthly mortgage payments, check out this FHA Mortgage Calculator
Home Inspection Requirements
A home is one of the biggest investments you will ever make in your lifetime. This is why making sure that the home you intend to buy is in good condition is so important. Though all FHA mortgages require a home appraisal, they do not require a home inspection. Many borrowers confuse the two and mistakenly assume that an FHA appraisal is a guarantee that the house is in good condition. In actuality, an FHA appraisal is for the lender, not the borrower. If you want to avoid buying a lemon, you will need a home inspection.
The FHA does not currently have home inspection requirements. Even so, a home inspection is in your best interests; it is a very good idea to get one prior to making a home purchase. A home inspection will:
- Evaluate the structure and construction of the home.
- Estimate the remaining useful life of the home’s structure and mechanical systems.
- Identify potential problems and items that will need to be repaired and/or replaced.
Once your home has been inspected, you will receive a written document that details all findings. This document is very important and can protect you from making a poor investment. Remember, FHA provides insurance for lenders, not borrowers. They do not guarantee anything and they will not buy the home back from you if you find a problem after closing. This makes the small amount that you will have to pay for a home inspection well worth the money.
Learning More about FHA Mortgages and Home Inspection Requirements
FHA mortgages may make your dream of homeownership come true. If you want to learn more about FHA mortgages and home inspection requirements, you should visit FHA.com. You can also speak with an FHA expert at 1-866-363-7907.
More Mortgage Information
Want more information about financing a home? Check out these informative slideshows.
Learn More
Comments
FHA will have an inspector look over the property to make sure it adheres to FHA standards, but this should not be considered as a replacement for a home inspection commissioned by the buyer.
-- Contributed by: Tamsen ButlerShannon, this is usually the case with FHA mortgage loans. To learn more about this process, read the LoveToKnow article about escrow.
-- Contributed by: Tamsen ButlerNow, does that mean FHA has their own home inspector that will come out and inspect the home or do they rely on the report given by the home inspector that the buyers hire?
-- Contributed by: mattThis page has been accessed 38,973 times. This page was last modified 03:40, 17 June 2009.
© 2006-2009 LoveToKnow Corp.
Print this page
Email to friend
Follow ltk on twitter
