If you don’t know anything about finances, but would like to learn more, you have definitely come to the right place. Today, we will be discussing some basic terms in finances, banking and insurance. These terms are used daily, and they just might help you out with some important issues in your life, such as getting a mortgage loan.
So, What Is An FHA Insured Loan?
The first thing we must do of course is explain what an FHA in ensured loan is and what you need to know about it when you are looking for the best FHA mortgage lenders in Dallas. An FHA insured loan is Housing Administration mortgage insurance backed mortgage loan that is backed by a US Federal Housing Administration mortgage insurance. An FHA- approved lender can provide citizens with an FHA loan. The FHA insured loans are a type of federal assistance, in other words, this is the way for your country to do something for you. The loans have been used by Americans to borrow money in order to purchase a home that they would not otherwise be able to afford.
How Do I Get An FHA Insured Loan?
If you are interested in getting an FHA loan in Dallas, it is important that you read this, but more importantly I would advise you to go to the Federal Housing Administration. The upfront mortgage insurance premium, or UPMIP, is equal to 1.75 percent of the base loan, depending on the price of the property that you intend to buy. At closing it is necessary that you have this amount, and the rest is normally financed through the loan. In addition to that, you must also take into consideration that there is MIP, a monthly mortgage insurance premium. The MIP is based on the amortization term and loan-to-value ratio.
The History Behind An FHA Insured Loan
The program of FHA insured loans originated during the Great Depression, in the 1930s. The time when in the rates of foreclosures rose unexpectedly, and the program while originally devised as a way to provide lenders with sufficient insurance. In addition to that, we must also mention that some FHA programs were subsidized by the government, since the goal of FHA programs was to base insurance premiums which would be paid by borrowers. In time, PMI, or private mortgage insurance companies also came into this picture, and forced the FHA to become a service for people cannot afford the conventional down payment on a mortgage, or otherwise would not qualify for PMI. Since 1930 the program has obviously changed a lot, and it has been modified numerous times to accommodate the present situation.
Still, the FHA loan process remains a solution for many people in order to get a mortgage on a house. It should also be mentioned that the FHA essentially does not make loans. It’s rather insures loans made by private lenders.