FHA Mortgages in Utah 

What is an FHA mortgage?

An FHA mortgage loan may be a good option for you if you are purchasing or refinancing a home and have limited funds or equity to use as a down payment.  FHA stands for Federal Housing Administration; the agency is part of the U.S. Department of Housing and Urban Development.  After the Great Depression, a great number of mortgage loans went into default and many homes went into foreclosure.  The U.S. government developed the FHA loan program to help borrowers and lenders by providing mortgage insurance that will protect the lender in case the borrowers default on their mortgage.  At the closing of an FHA loan, a MIP (mortgage insurance premium) is charged to the borrower and paid to FHA, giving the borrower the benefit of reduced interest rates and down payments.

Borrowers of all income can benefit from an FHA mortgage.  The benefits include some reduction in closing costs, allowance for reduced credit scores, and the ability to qualify at slightly higher debt to income ratio’s.  Lenders of FHA loans are encouraged to make loans and approve borrowers and properties that would not qualify for a conventional mortgage because mortgage insurance is in place to help protect them from losses. In today’s market, while conventional mortgages can rely on private mortgage insurance to allow for reduced down payments, the insurance fees and interest rates of mortgages exceeding an 80% loan to home value (or purchase price) are often significantly higher than with an FHA insured mortgage.

The government is not a lender and does not provide loans.  The way to obtain an FHA loan is to work with a mortgage loan company that has been approved to originate FHA loans by the U.S. Department of Housing and Urban Development.  Trillion Mortgage, a Utah mortgage broker, has this approval and is fully licensed to originate FHA loans.  As a broker, we work with many lenders to provide our clients with the greatest flexibility, the ability to shop for the most competitive rates, and a fee structure you will feel good about without losing that personalized service you want when shopping for Utah mortgages. After applying for an FHA loan, the mortgage loan company will analyze the credit, income and debts to verify the loan amount that that the borrowers can qualify for. FHA has loan limits based upon the location of the property.  Borrowers with limited credit history may still qualify for an FHA loan.  Having an experienced mortgage loan company working for you will help to get your loan approved and closed in a timely manner.