My little forum on home loan
Monthly mortgage payments go first toward paying down interest, then to actual principal. The attraction of this type of mortgage loan lies in the security of having a set monthly payment amount. FHA (Federal Housing Administration) mortgage loans are not loans, per se, rather federal mortgage insurance that minimizes the default risk to participating lenders when borrowers cannot put down a deposit equal to or greater than 20 percent of the purchase price. The FHA does limit mortgage amounts but does allow mortgage loans for borrowers with bad credit and, for that reason, some people may find the qualification process for these mortgage loans easier. VA (Veterans Administration) loans are mortgage loans that are guaranteed by the VA in the event of default.