A licensed mortgage broker is a good resource for people who
need a little extra help in getting a mortgage. The Federal Housing
Authority wants to help people in that situation as well. Consumers
who do not fit the profile of the ideal loan customer –
those with credit or income verification problems, or those with
credit issues, for example – can go to an experienced mortgage
broker for assistance in obtaining a mortgage loan that is underwritten
by the FHA. This means customers that lending institutions find
less than attractive are not locked out of the housing market.
For example, an FHA loan can be a good choice for consumers who
have been turned down for a mortgage loan because their down payment
was a gift.
Since the Federal Housing Authority does not actually loan funds,
but rather it insures lending entities against the possibility
that a consumer will default on their loan. Therefore, instead
of applying directly to the Authority for a loan, consumers need
to file their application with a lender who offers what are commonly
referred to as “FHA loans”.
A licensed mortgage broker can offer a consumer a variety of
choices so they may be able to take the best advantage of what
the FHA loan program has to offer. While not all individuals qualify
for FHA insured loans, many people meet the requirements and are
able to utilize the assistance offered.
Your mortgage broker will explain how an FHA loan works and inform
you about specifics such as the fact that you will most likely
be required to carry mortgage insurance until the equity you have
in the property meets a specified level.