The Federal Housing Administration, or FHA, is an agency of the government that is designed to help improve housing standards and provide home financing through a system that not only provides home buyers with loans but also provides mortgage insurance. Mortgage insurance from the FHA assists home buyers in obtaining mortgage loans from approved lenders by guaranteeing payment on the loan if the borrower defaults. The payment of this mortgage insurance can be incorporated right into the monthly mortgage payment or a portion of it can be paid upfront to reduce monthly payment amounts.

The best time to choose a short sale is when you owe more on your home than it is worth. Let’s say that your home is worth 450,000 and you owe 470,000 then a short sale would be the way to go. Obviously, if you do not have to sell your home, you could wait out the market and hope for a turnaround in real estate values.

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