Bad Credit FHA Mortgage Loan – Advantages of Poor Credit FHA Loans!

During this terrible slump in the economy, consumers are struggling to find ways to obtain a home. Some of these same consumers have developed bad credit due to the lack of employment and soaring interest rates in the loan arena. For this reason, would be home owners are doing exhaustive research on what is best for them in these days of hardship. Some prospective home buyers try to obtain a Bad Credit FHA Mortgage because they are designed for those who cannot afford the conventional private mortgage loans.The FHA loan program originated during the great depression and is available now during the depression that America is experiencing.The first thing to understand is the FHA does not make loans to individuals, they insure them. FHA is a mortgage insurance company that help low to moderate income consumers lower some of the cost of their home loans. They protect the lenders from loan default of the borrower.FHA has various programs which has features designed to allow borrowers to obtain mortgage financing. Similar to a VA loan, in a Bad Credit FHA Mortgage, the borrower must make arrangements with the lender. An evaluation must be made by the FHA.Even though a person may have low credit scores, that doesn’t mean they cannot own a home. That is where Poor Credit FHA Loans can help. You can use the advantages of Poor Credit FHA Loans to buy you a new home!The advantages of FHA insurance programs include a program know as section 251 which allows a lower interest rate which will also help lower the down payment. A large down payment makes it hard to obtain a loan.Nevertheless, there are some qualifications for a Bad Credit FHA Mortgage Loan. First of all, one must be steadily employed for at least 2 years, have less than 30 days of late payments on their credit report, foreclosures must be less than 3 years and credit must be good and of course, mortgage payments should be at least 30% of the borrowers income.As mentioned earlier, another advantage of Poor Credit FHA Loans is the loan is guaranteed to be paid off. And believe it or not, people with bad credit rating can get bad credit FHA mortgage loans a lot easier than the conventional loan. Keep in mind, the loan is not given directly to the borrower, but to the lender. Because this is an insured loan, most borrowers can get their home financed a lot quicker.The bottom line is even if you have low credit scores does not mean you cannot buy a home. Also you don’t need a 20% down payment, a FHA loan only require a 3.5% down payment. You can get more information on Bad Credit FHA Mortgage Loan by clicking on the links at the bottom of this article.The advantages of a Bad Credit FHA Mortgage Loan will help you can live the American dream of home ownership and start repairing your credit by making your home mortgage payments each month instead of making rent payments.

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