Great Reasons to Consider an FHA Mortgage

Dated: 01/16/2013

Views: 1084

  1. First time homebuyers can generally come in with less of a downpayment. Truthfully, conforming or conventional loans generally want 5% down. FHA loans only need 3.5% down. How cool is that?
  2. The entire downpayment for an FHA loan can be in the form of a gift. There are gift restrictions as to who can give you a gift, but generally, if you're related, you can help someone out by gifting them the entire downpayment and closing costs. Borrowers can put zero of their own money into the transaction. You know that with conventional loans no matter what the borrower needs to put 5% of the purchase price into the transaction, unless the borrower were to 
    receive a gift of at least twenty (yes 20) percent. Makes FHA so much more attactive.
  3. Credit scores and credit in general. - While FHA is slowly inching to mirror the credit requirements of conventional loans, for now, FHA still allows lower credit scores. In fact, scores alone, can't be used to make a credit decision. Also, when you're coming out of a Bankruptcy, FHA is so much more forgiving as to the time lines as to when someone can buy a house. Credit scores and credit requirements are so much more lenient with FHA.
  4. Non-Occupant Co-Borrowers- THIS IS A BIGGEE! I do this all the time. The borrower can have someone co-sign with them even if the person who is cosigning isn't going to live within the property. The loan gets qualified on the income and debt on the borrower and the non-occupant co-borrower together. And still only 3.5% is needed for the downpayment. On conventional loans, 10% down is needed and the borrower still needs to put 5% down against the entire transaction and still qualify for carrying a significant part of the mortgage payment. For FHA, the borrower can not be earning a penny all year, but so long as the borrower and non-occupant co-borrowers combine to qualify together, we're good to go! I have dads and mom buying homes with kids in college. The kid is the borrower and mom and dad co-sign.
  5. Appraisals - Appraisals used to be so difficult when going FHA. That's no longer the case. FHA, for the most part, mirrors those of Fannie Mae and Freddie Mac. They do also protect the borrower in that if there were substantial and material defects that would cost the borrower a lot of money in the first year of ownership to fix up, they'll address those issues, but the same can now be said of conforming loans.
  6. And How about 1 for the ditch - MORTGAGE INSURANCE.....HOT OFF THE PRESS......FHA will soon be dropping mortgage insurance once it hit's the 78% LTV just like conforming loans as well.  This is JUST BREAKING NEWS and puts a bit back in the pocket for the consumer with this new announcement.

Want to Advertise on this Site?

Latest Blog Posts

HALLOWEEN SAFETY TIPS

http://www.healthychildren.org/English/safety-prevention/all-around/Pages/Halloween-Safety-Tips.aspxHalloween Safety TipsHalloween is an exciting time of year for kids. Here are some tips from

Read More

GREAT OUTDOORS

https://porch.com/resource/the-great-outdoors?_cldee=bWV0cm9wb2xpdGFuZGlnc0BnbWFpbC5jb20%3d&recipientid=contact-d2b9d7ce9c6b4c6da6c855628abffbaa-4a3b33911df34533af494d808990423f&esid=4ebeecce-65eb

Read More

Best Apple Picking In NJ

The beginning of fall is my favorite time of the year.  The cooler weather, the foliage and apple picking!  One of NJ's best kept secrets is it's abundance of orchards and farms filled;

Read More

Fun Facts About First Time Buyers

Downloaded from http://www.dotloop

Read More