Everyone is talking about FHA home loans helping home buyers borrow more money affordably. Keep reading for the inside scoop.FHA mortgage loans are taking off according to National Mortgage News Online. There is a trend developing here and there’s a good reason why.FHA, the Federal Housing Administration, doesn’t make loans directly but it insures its approved lenders against loss. An approved FHA lender is any mortgage originator that has qualified with the Federal Housing Administration and met their standards.An FHA insured loan insures the lender in case the borrower defaults on his payments. However it does not insure the borrower, a common misunderstanding. But it does allow for lenders to offer mortgage products with low down payments that a lending institution might not otherwise offer.If you are wondering how a lender decides what is the maximum mortgage you are allowed to borrow, it takes into account several factors.The debt-to-income ratio is the first and foremost issue to determine affordability for the maximum loan amount on an FHA mortgage loan. It is a simple calculation that compares your gross income before taxes to your housing expense. Your housing expense is a combination of your prospective monthly payment of principal, interest, taxes […]

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