The Federal Housing Administration, or the FHA, is a loan program that helps individuals buy and purchase their own homes. There are many benefits that come with applying for and obtaining an FHA loan.

1. Lower Mortgage Costs

One of the big benefit of applying for an FHA loan is that all the costs associated with getting a loan for a home are significantly lower. You generally are able to pay less in closing costs. Your mortgage insurance rates are often lower than they are for conventional student loans, saving you money over the life of your loan.

Another huge cost that is lowered when you get an FHA mortgage is your required down payment. FHA loans require down payments that are at least half what conventional banks ask for and often are even lower than that. That means that you have to have a lot less cash saved up in order to purchase a home with an FHA loan.

2. Interest Rates that Are Competitive

Another benefit of applying for an FHA loan is that you know that you are going to be offered mortgage rates that are competitive with some of the best mortgage rates on the market. You are not going to get locked into a scary subprime mortgage rate that is going to make it hard to ever pay off your loan. You are going to be offered a competitive, or even a lower interest rate, that will ensure that your payments are affordable and that you are able to pay off your loan within a reasonable amount of time.

3. Reasonable Application Terms

One of the final and biggest reasons many people consider FHA loans is due to the reasonable application terms. Although you will be able to secure a lower down payment if you have a higher credit score, the FHA does not immediately disqualify you if you have a lower credit score. The FHA is willing to work with individuals who have a lower credit score and help them obtain a home. The FHA looks beyond your credit score number to the reasoning behind your credit score. They like to help people without much of a credit history purchase a home.

The FHA is also willing to work with individuals who have faced bankruptcy or foreclosures in the past, but who are taking steps to improve their financial life. Financial life improvements can be shown by paying your bills on time, paying down debt, and holding a steady job. For more information, contact your local mortgage broker.