NCh7 FHA - Federal Housing Administration Flashcards
What is the purpose of the FHA?
To aid in home financing by ensuring the loan and protecting the lender. .
How much of the loan does the FHA insure?
The whole amount
Who pays for the FHA insurance?
It is paid for by the borrower
What is required for an FHA loan?
An approved appraisal
What is the insurance on the FHA loan referred to as
MIP - mortgage insurance premium
How is the mortgage insurance premium paid?
It is paid monthly in addition to the PITI payment
What organization oversees the FHA program?
HUD
What are two advantages of the FHA loan?
Qualifying ratios are slightly more lenient, allowing borrowers to have more debt, and still qualify
LTVs are very high along buyers with little money for down payment to purchase property
How can points on an FHA loan be paid?
By either the buyer or the seller
As opposed to MIP what type of insurance is utilized in the private sector?
PMI - private mortgage insurance
When would a borrower be required to have PMI (private mortgage insurance?
If he has less than 20% down payment
What percentage of risk does PMI protect or insure of the lender?
Usually no more than 30% of the loan
