Friday, May 14, 2010

FHA Home Loan

Federal Housing Administration, a federal agency, comes directly under the Department of Housing and Urban Development, USA. It has a purpose of stimulating home ownership, especially home ownership for the low income groups. It is there to help the home buyers in their home ownership dream by giving them the best options.

FHA provides two types of packages depending upon the family size. Single family package consist one to four units, while multifamily package consist five or more units. The interest rates are kept low usually for the good of the prospective buyers and the tax saving options are also given. All in all, FHA home loan are the best option a prospective buyer can get.

FHA also provides home equity loans. Equity refers to the difference between the current value of the home and the pending loan or the debt. One of the great positives of equity is that it is tax deductible, which means there are saving s beyond the interest rates and loan term. While saving tax, it also gives the best option available to the consumer as the rates are usually very low.

Equity home mortgage is of two types, HEL and HELOC. HEL refers to simple Home Equity Loan, which lump sum amount, and fixed payback scheme. HELOC refers to Home Equity Line of Control which is flexible, means you can take the funds whenever you need, and pay back in flexible monthly installments and not necessarily fixed installments.