If you want to buy a home and are wondering what is an FHA loan, here’s an answer. An FHA loan is a loan backed by the Federal Housing Administration. Generally speaking, more people can qualify for an FHA loan than a conventional loan with income limits being less restrictive than some programs. However, there are limits on how much you can borrow. You’re limited to smaller mortgage loans relative to home prices in your area. To qualify for an FHA loan, you’ll need to have a reasonable debt to income ratio. Simply said, the lender needs to know that you can afford to pay back the loan. In addition, you have to have decent credit. So, how do you know? The first step is to come to any of the mortgage loan professionals at the Merchants Bank location most convenient for you. Click here for a list of our locations and hours. Loans are subject to credit approval.
Still want to know more? View our informational video: FHA Loans: What You Should Know