A Quick Look at FHA Mortgage Types
There are many different types of FHA Mortgages obtainable to anyone who qualifies to buy a home. Qualifications can sometimes be surprisingly easy for these mortgages as they are geared toward lower and middle income home buyers. clearly a good credit rating and job history will make it easier to qualify but already applicants with less than perfect credit can sometimes qualify for one of the many types of FHA Mortgages.
The FHA Adjustable Rate Mortgage was specifically designed for people that are unfortunately in the lower income bracket. It is a HUD mortgage by design and is meant to provide lower starting payments and lower origination costs for closing. This kind of loan also protects the lending institution from any losses if the home has to be foreclosed on for non-payment.
Another kind of FHA Mortgage is the Graduated Payment Mortgage. This kind of mortgage is for applicants that are currently considered low income but that income is expected to rise over the next 10 years. The payments for this kind of mortgage start out much smaller but increase little by little over the years in conjunction with the applicant’s projected income. These payments always go up, they never go down. Once the ten year mark has been reached, the payments plateau and will not go up any higher, unless taxes or insurance costs change.
The FHA Fixed Loan Mortgage is the most shared kind of FHA Mortgage. It helps the applicant buy a home when they may not qualify for a traditional Mortgage. The interest rate is fixed on these kind of loans meaning it never changes. The only fluctuations in the house payment will be if taxes or insurance rates change over the duration of the loan.
FHA also does mortgages on condominiums. These kind of mortgages are for lower income to medium income applicants that choose to live in a condominium complicate instead of purchasing a traditional home. You can finance up to 97% of the buy price for a condominium with the FHA Condominium Loan program. The other 3% will need to be paid with a down payment at closing.