The best mortgage companies for FHA loans are those that are willing to work with you. Even when working with the FHA, it is still important to compare lenders to find the best mortgage loan for your needs.
About the Best Mortgage Companies for FHA Loans
Companies become FHA-approved lenders after meeting the qualifications of the FHA to offer these loans. These companies must meet specific guidelines for how they approve borrowers and must have at least 20 percent liquidity in net worth. The companies must also have a sponsoring lender holding FHA approval. Then, companies can apply for their own FHA lending status.
Once a company has FHA approval, it must maintain specific standards when lending by qualifying borrowers for loans based on credit and income levels.
This type of qualification allows lenders to lend to some borrowers who have a lower credit score or income but who also have an FHA guarantee. When a borrower wants to obtain an FHA loan and meets the criteria to do so, the FHA insures the loan. If the borrower fails to pay as agreed on the loan, the FHA protects the lender to some degree. Much like an insurance plan, the lender receives a settlement offer if a borrower defaults on the loan.
Keeping this in mind, realize that these standards are in place for all mortgage lenders qualified to offer FHA loans. Aside from these factors, interest rates, terms, and other aspects of a mortgage differ from one lender to the next. It is up to the borrower to find the best lender for their financial needs.
To find a list of FHA lenders in your area, visit the HUD website. You can look up lenders based on various criteria such as location, size, reverse mortgage lenders, and the type of servicer-originator.
Finding the Best Lenders
Compare several lenders to determine which offers the best FHA mortgage loan for your needs. Look for differences in lending interest rates and term lengths. Some companies may offer a significantly lower interest rate than others may, making the loan more affordable for you. In addition to this, learn about the company's financial backing and the history. Compare reviews of the companies as well.
The following companies are some of the best mortgage companies for FHA loans due to their size and flexible lending options. Compare these to local lenders and other mortgage companies as well.
- Wells Fargo provides FHA loans. This company provides aid to borrowers unsure if an FHA loan is right for them. A free program to look into is the company's Steps To Success Program. Interest rate information and applications are also available at the Wells Fargo website.
- Work through the steps to find out if you should obtain an FHA loan at the Bank of America website. This company allows borrowers to apply for loans online as well.
These are just a few of the national FHA-approved lenders available to borrowers. Local companies may offer better rates to those who are long term customers. If you have been a member of a bank or credit union for a long time, they may offer a lower interest rate to you than these and other national lenders.
Finding the Best Option
Trying to determine which lender is the best FHA lender can be challenging. Take the time to request quotes from several lenders and compare them for:
- Interest rate offered
- Term length options available
- Fees and closing costs
- Ability to close quickly
Compare companies based on qualifications such as the length of time the company has been operational and the company's credit rating. This helps ensure the lender you are working with is going to be available long term. Finally, look for reviews of the lender from previous customers. A simple search online with the company's name followed by "review" can often produce the information you need to make a decision. All of this information combined helps you to choose the right lender for your needs when buying a home with an FHA loan.
