Features of FHA Loans That Help the First Time Home Buyer

The FHA home loan has been the poster child for first time home buyers for several years, and with good reason. The low down payment, the generous loan amounts, and the low private mortgage insurance rates have been a real boost to helping many people acquire their first home. There are some other features of the FHA loan that some people may not fully understand. As far as mortgage insurance goes, the general population feels it is just a protection for the lender. For the most part, this is correct. Whether we are discussing private mortgage insurance for a conventional loan or the FHA mortgage insurance, the monies are placed into a specific fund. The fund is used to pay lenders if the borrowers fail to make the payments on the loan.