Understanding the Basics of an FHA Mortgage

Getting a mortgage and purchasing a home is a big decision. One part that is sometimes confusing is understanding what mortgage you may qualify for and how it works. Vanderbilt offers a variety of loan programs and will help you determine which one best fits your family’s financial situation.* If you are qualified, an FHA loan could be the best option for you, but first you need to understand FHA mortgage basics, so let’s find out what those are!

What is an FHA mortgage?

FHA Mortgage Basics

An FHA loan is a mortgage backed by the Federal Housing Administration. An FHA loan allows for a lower down payment requirement than a typical conventional loan which benefits the borrower. 


When is an  FHA loan preferred?

selecting a home loan

An FHA mortgage is often preferred by first-time homebuyers because of the reduced credit qualification requirements and because FHA encourages lenders to offer FHA loans at lower rates.

Benefits of an FHA mortgage

-          Lower down payments
-          Lower rate

-          Reduced credit qualification requirements

What are some of the required documents for an FHA loan?

home loan calculator


After you have been conditionally approved, you are ready to start the FHA loan process! Be prepared to provide the following information to your loan specialist:

-          Credit information (most recent bank statements)
-          Your Employer information from the past two years
-          W2s from the past two years
-          Income Tax Returns for the last two years
-          Social Security Number
-          Verification of funds that will be used for down payment
-          Others necessary information

Additional information will be needed, but having this information ready will help you get started.

Just as a reminder, there are some fees you might forget about when you start shopping for a loan.   Be sure to ask what fees may apply to your loan which can include FHA mortgage insurance, appraisals, inspections, credit reports, and documentation preparation fees for other aspects of the home loan process. Make sure the lender you choose provides you with a list of fees you are expected to pay and when they will be due so there are no surprises during your loan process.  

 

Not ready to apply for a loan just yet? Check out our Guide for Homebuyers to learn more about the mobile home loan process, see tips for first-time homebuyers and more!

homebuyers guide to mortgages

*All loan programs are subject to credit approval.