Reasons to think about using FHA for your mortgage!

FHA mortgages have had a bad reputation lately and there are times that this is the best mortgage for you.  Everyone is different and if you have great credit and at least 5% down, conventional is probably the better mortgage for you.  But don't be afraid of FHA mortgages!  There are some benefits to FHA mortgages – here is a list of reasons to use an FHA mortgage!

1. FHA loans allow for a low down payment and have flexible guidelines on where that down payment can come from. Gift funds and some down payment assistance programs are not an issue.

2. More flexible on credit requirements. FHA has a much lower credit requirement than lenders, but the typical 640 minimum score that most lenders require is still very low.

3. Rates are typically lower than a conventional mortgage and come with higher overages available to you to offset those closing costs.  Lenders can help you by paying some of your closing costs.

4. The underwriting guidelines are much more relaxed than a conventional mortgage.  FHA allows you to purchase a home 3 years after a foreclosure and 2 years after a bankruptcy.  Conventional loans require a longer waiting time.

5. The one most people forget about and shouldn’t—the fact that FHA loans are assumable. This means when you go to sell your house, let’s say seven years from now, this is a selling point to your potential buyer. If rates are at 5.5% and you can offer them an assumable mortgage at 3.5%, that will help sell your home faster!

There is also some discussion about a new program with FHA loans that will allow you to lower the mortgage insurance.  This is still in the works but may be rolled out later this year.  It would involve taking a first time homebuyer class and maybe some individual counseling.

If you are thinking about buying a home, talk to your loan officer and find out about both conventional and FHA mortgages.  Once you know more about your own situation, you can decide which program is better for you!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, NMLS#150953 - Email - Website

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

Related Posts

Weekly real estate market update… Goldman Sachs predicts the worst is behind us

Market stats are encouraging, as new and coming soon listings show a slight increase… and pending sales continue to rise while price drops decline. Even multiple offers are showing a...

4 Home Binder Printables for Any Stage of Homeownership, and How to Set up the Binder

Looking for a better way to organize your home? Try making a home binder with these 4 printables for any stage of homeownership.

Subscribe to Our Newsletter for Market Updates & Mid-Century Modern Listings

Our weekly HomesMSP Update includes current local market information and a curated list of mid-century modern properties for sale, plus posts from an inspector, a lender, a stager, info about neighborhoods, life in the Twin Cities… even recipes!
Hidden

Blog Categories

Archives

Sharon and John Hensrud

About Us

The HomesMSP Team is committed to meeting you where you are and listening… really listening to understand you so we can use our extensive knowledge of the market and local neighborhoods to give you personalized service.