Debunking Common Myths About FHA Loans In California

Everyone deserves to live in a comfortable home that they can call their own. However, one of the hurdles that often gets in the way of achieving this dream is the significant amount of money needed to pay for a new home. However, the reality is that nobody ever uses cash to pay for their home upfront anyway.

The norm is to take out a mortgage and use that to acquire the property and pay off the loan over some years. In line with this, you may be wondering if an FHA (Federal Housing Administration) loan is a good mortgage option for you. However, you may have heard some myths about FHA loans that make you hesitant to try and apply for one. This blog post will help weed out the myths and uncover the truth about FHA loans and why it may be a good idea for you to consider this type of mortgage option.

Debunking Common Myths About FHA Loans in California

Myth 1: The Government Is Funding the Loan

Many people are under the impression that the government is backing the loan since the F in FHA stands for “federal.” The truth is that the loan is only approved by the FHA. The one who will be lending you the money is the lending agency, not the government.

Myth 2: FHA Loans Have Impossibly High Interest Rates

When it comes to interest rates, FHA loans will base the interest rate they give you depending on the amount of risk you have. If the lender sees that you have a higher chance of defaulting on your loan, they will assign a higher interest rate. However, since the loan is backed by the government, a lot of the doubt will go away, and you may be granted a lower interest rate with an FHA loan.

Myth 3: Only People with Low Credit Scores Qualify

This is another myth that needs to be busted. Although FHA loans help people with low credit scores get the chance of being able to get a mortgage, it doesn’t mean that you will automatically be disqualified from getting approved for an FHA loan if you happen to have good credit. 

Myth 4: FHA Loans Can’t Be Used to Buy a Condo

You can use an FHA loan to buy many kinds of properties. As long as the property you want to buy meets the minimum FHA standards, you may be able to use this type of mortgage to acquire it. Likewise, as long as the home meets basic safety and livability standards, it will likely meet the FHA standards. 


If you have read this far, you will now be aware of the truth behind these myths circulating about FHA loans. Although this is not a fully inclusive list by any means, the next time you hear something about FHA loans, you will know that you should take it with a grain of salt before you believe it. The trick to knowing what to believe about FHA loans (or any other mortgage options) is to consult a mortgage broker. These professionals will ensure that you make an informed decision about what kind of mortgage will work best for your needs. 

Whether you need an FHA loan in Sacramento or want to have your current mortgage refinanced, you can come to Hawkins Home Loans! We are your online resource for a stress-free process, incredibly low rates, and fantastic service. Find the right mortgage that fits your needs by scheduling an appointment today!