Government Loans – Apply for Them and Save Money

If you’re searching for a home loan, it’s important to find out if you qualify for any government loans, because they can often save you a good amount of money. Both the Federal Housing Authority (FHA) and Department of Veteran Affairs (VA) offer government sponsored loans which may make it easier for those with imperfect credit or other financial situations to obtain a home mortgage loan.

The FHA is a federal program that works to provide housing loans to people who otherwise might not be able to obtain a loan because of financial limitations. FHA accomplishes this largely through insuring the loans provided by banks and lenders so they are more willing to hand them out to clients that may be more of a risk. If you do qualify, there are some amazing benefits to an FHA loan. First of all, you may only have to provide a down payment as low as 3% of the purchase price of the home, and in some cases even lower. This can be an enormous boon to those who think they can’t afford a home simply because they don’t have enough for a down payment. Also, there are no limitations on maximum or minimum income, which means you don’t have to be extremely wealthy to afford a loan. FHA loans come in all forms, fixed rate and adjustable rate, so you can choose the best for your needs and situation. And since the loan is federally insures, you’ll even be able to avoid a Private Mortgage Insurance payment (PMI).

The Department of Veteran Affairs has even better benefits for those who qualify. A VA loan will enable you to provide absolutely no down payment for up to a $240,000 loan with no PMI payments. Also, the qualifications for approval are even more loose than FHA loans, so if you’re a veteran, regardless of your financial situation or credit history, you can still be approved for a loan. One drawback to a VA loan is that you can only receive a fixed rate loan, but the ease of getting the loan and the little money required to receive it make it worthwhile.