The FHA Loan and the Mortgage Broker

Have you been reading up on the FHA loan and you are sure that this is the sort of loan program that is right for you? If so, you may be wondering why you need to call a mortgage broker and why you cannot just call up the Federal Housing Administration and ask them for the loan. What you need to understand is that the FHA does not actually give out the loans, so you need to call a broker to help you apply for the loan and get the financial help that you need. The FHA is just one part of the equation so pick up the phone and call a broker to get the process started.

What the Mortgage Broker Does For You

When you call a mortgage broker and you tell them that you want a home loan you are actually getting a loan from them or the lender that they work with. The FHA loan is not actually given to you by the FHA. All that the FHA does is insures the loans that the authorized lenders give to borrowers. When the FHA insures he loan they are removing or at least minimizing the default risk that they take on when the lender works with a buyer that puts down less than 20 percent on the purchase price of a home.

The mortgage broker or lender actually does all of the work, so you truly do need them. The first thing that the broker or lender will do is take your loan application from you, which is a process in and of itself because so much information is required. Then, they will actually process the loan application, sending it to the lender if you are working with a broker, or sending it to the FHA to see if it meets their specifications. Then, the broker and/or lender will underwrite and close the loan.

As you can see, you really do need your mortgage broker to help you get the FHA loan that you want. Without them you will have a difficult time actually getting that loan so you can buy the home that you have been dreaming of. It can be difficult at first to differentiate between the mortgage broker, the lender, and the Federal Housing Administration, but you need them all to make your loan a reality.

The most difficult part of obtaining your FHA loan is finding the right mortgage broker to deal with. The important thing to remember is that there are thousands of brokers out there for you to work with and each one of them is going to offer you something just a bit different because each of them works with different lenders and each of them have their own fees and offers, and the differences can mean huge savings or huge expenses on the part of the borrower. You should be sure that you shop around a bit when you need a home loan to ensure that you are getting the best deal for you. While the FHA doesn't actually give you the FHA loan that you need, without them millions of home owners since the 1930's wouldn't have experienced the pride and joy that comes from owning their own home. This may just be the type of loan that you need to get you into the home of your dreams!