FHA loans

FHA loans are loans from private lenders that are regulated and insured by the Federal Housing Administration (FHA) , a government agency. The FHA doesn’t lend the money directly–private lenders do. 

FHA loans:

For borrowers with good credit and a medium (10-15 percent) down payment, FHA loans tend to be more expensive than conventional loans. For borrowers with lower credit scores or a smaller down payment, FHA loans can often be the cheapest option. 

But there are no hard-and-fast rules—a lot depends on the current market. If you’re not sure, ask lenders for quotes for both options and compare total costs to see which offers the best overall deal.

 Mortgage insurance is required for all FHA loans. More on mortgage insurance.

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