Jericho, New York (PressExposure) October 28, 2009 -- Government insured and sponsored loans are those loans that are regulated and sponsored by the government. These types of loans have several benefits over conventional loans; they have minimum or no down payments; have low rate of interests, and most importantly allow a borrower with average credit history to purchase a home. Government sponsored loans most often do not carry pre-payment penalties, making them the most sought after loans available.
Topdot Mortgage is one of the few loan providing firms that has recently launched FHA (Federal Housing Authority) loans or government sponsored loans for its clients. There are three basic types of such FHA loans; 30 year fixed rate and return loans, 15 year fixed rate and return loans, and 1 year adjustable rate and return loan program. These specialized loans offered by Topdot Mortgage allow loan advantage to those clients who have a few credit problems, or those who fall short of conforming or subprime guidelines. FHA loans are regulated and insured by the Department of Housing and Urban Development (HUD).
FHA loans have a number of advantages. For a lender, a 30-year fixed mortgage loan offers better pricing than conforming fixed rates. The greatest plus point for a homeowner is that he can refinance up to 95 percent cash with the help of FHA loans without requiring any cash reserves. a From borrower's perspective, the down payment of these loans can come from a variety of places including gift funds, employer, a relative or a non-profit agency; such an option is not there in conventional loans. FHA loans also allow a seller concession of six percent on all purchase transactions. Another benefit for those who have a limited or no credit score is that they can get the advantage of alternative non-traditional credit as there is no minimum credit score.
With all these advantages FHA loans can prove to be the perfect product to help borrowers achieve their dreams.