An FHA loan is a typical loan that many people use. One of the great things about working with an FHA loan is that the mortgage counselor will really work with you to make sure that you can afford the loan that you are taking on. The loan company will look at all of your debt which included cars, credit cards, student loans, alimony, and child support. They will examine your debt to income ratio and come up with a home price that you should be comfortable with the payments.
Another great thing about the FHA is that if, for any reason, you are unable to carry the loan on your own you are able to have a cosigner on your loan. The cosigner on your loan can be anyone that you trust that has good credit and good income. The cosigner on most loans is usually a parent. While having the cosigner option is a great way to get a loan, you need to be sure that you can actually afford the home that you are purchasing. If for any reason you are unable to make a payment on the home, your cosigner will then be responsible. You cannot only damage your credit by not paying your mortgage but you can damage the credit of your cosigners.
Another important thing to consider about a FHA loan is that you will need to have 3.5% of the loan saved before you purchase the home. 3.5% may not sound like a great deal of money but on a $250k loan, that is $8750. You will need to make sure that you have that kind of money on hand or can prove that the amount was a gift. You are not allowed to take this amount out on credit or pull it from other debt like credit cards.