Mortgage insurance: Fixed rate mortgage, FHA Loan, PMI and types of mortgage loan

FHA - Federal Housing Authority Mortgage:

A FHA mortgage is a residential loan insured. The FHA is part of the U.S. Department of Housing and Urban Development (HUD). FHA loans have lower mortgage down payment requirements and are easy to qualify for compared to conventional loans. The goal of the FHA is to make housing affordable and stimulate demand.
The best feature of an FHA loan is it allows for a low down payment. The down payment mortgage can be as low as two percent, but you will be required to pay private mortgage insurance (PMI). The FHA mortgage loan amounts are determined by the median prices in different cities within a specific region.

Who Can Get an FHA-Insured Mortgage?

People who will reside in the property being purchases qualify for FHA-insured mortgages. These individuals should have a good credit history. They should also be able to pay for closing costs and have a stable and adequate income to make monthly mortgage payments with no difficulties. HUD does not require a maximum age limit for the borrower. HUD and other lenders determine if the borrower can pay for the mortgage based on several criteria, and income being just one. Therefore, HUD does not have set standards requiring a borrower with a certain income level to buy a home with a certain price. Furthermore, FHA mortgages are available to people regardless of race, creed, religion, sex, or marital status.

FHA-insured Mortgages:

HUD insures mortgages for buying existing homes, improving homes, purchasing a newly built home, and refinancing existing debts. FHA-insured mortgages are available for many types of properties. Some of these are listed below:

1.	One family residences
2.	Two, three and four unit Properties
3.	Condominium units
4.	Houses needing rehabilitation

There are many different ways these mortgages are designed. Some of the ways are highlighted below:

1.	Fixed rate, level Payment Mortgages
2.	Graduated Payment Mortgages
3.	Growing equity Mortgages
4.	Adjustable rate mortgages

Payments on an FHA-Insured Mortgage:

Your monthly payment depends on the amount of loan and the interest rate on the loan. The components of the monthly mortgage payment amount include portions of the following: principal amount, interest on the principal, FHA mortgage insurance premium, and taxes, and property insurance. It is required that the monthly mortgage payment should not exceed 29% of the mortgagor's gross monthly income in the case of an existing home, and 31% for a new construction. Advance Payments towards the principal are allowed; this can be done when making the regular monthly payment. Making advance payments enable you to save on interest and repay the loan faster. Also, the entire mortgage amount can be paid at one time as well.