subject: Fha Loans California [print this page] Since the Great depression in 1929, when millions of people lost their homes due to foreclosure, loan system was revised and Federal housing administration was established with the intent to regulate interest rates and mortgage terms on the loans that it insured.
FHA's main purpose was to purchase mortgages and insure them, allowing banks to turn around and make another loan without putting out significant capital of its own. This new mortgage practice made home purchase available even for many different working people. Also FHA has become active in areas such as financing the development of multi-family housing, the housing for the elderly, the handicapped, lower income people, inner city families and minorities.
Over the years, the role of the agency was reduced in today's mortgage market mostly because people were attracted to more untraditional mortgage packages. However, the rising rate of foreclosures on this particular mortgage packages made people return to the safety of FHA loan. FHA is currently pushed by market demands to develop more flexible and suitable loan products.
Whether taking advantage of FHA loan or using another mortgage financing system, people should be aware of the fact that the home buying process might get quite complicated. Thereby the home buyers should take things step by step in order to ensure they will be holding the keys to their own home soon. Most of all, future homeowners should do their homework about current houses' market prices and also think about what they can afford accordingly to their income, credit rating, current monthly expenses, down payment and the interest rate.
by: Alizarose
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