FHA Advantages and Disadvantages

So what are the advantages & disadvantages of an FHA loan?

ADVANTAGES:

* LOW CASH OUTLAY
- Buyers can get an FHA loan for as much as 97% of home purchase price. Only 3% down, not a bad deal.

* Down Payment & Closing Costs Assistance
- Buyers can receive up to 6% of the loan amount for both down payment & closing costs in the form of a loan from Utah Housing. So if forking over the 3% is a challenge, this is your solution to the credit crunch.

* Hud Homes
- $100 Down - HUD Home Buyers can get an FHA loan for only $100 down. Closing costs are paid by the banks / HUD. Only $100 down, not a bad deal.

* FHA LOANS DO NOT HAVE A PREPAYMENT PENALTY.
FHA loans do not have penalties for paying off all or part of the loan before the scheduled term. This feature also gives the FHA buyer the opportunity to refinance the loan to lower interest rates if rates decline (with some additional costs involved in refinancing).

* FHA LOANS ARE FULLY ASSUMABLE.
Yes, you read it correctly. These loans are assumable as long as the new buyer qualifies and is not an investor.

* FHA QUALIFYING GUIDELINES ARE EASY COMPARED TO CONVENTIONAL.
Yes, qualifying for an FHA loan is simple in comparison to a conventional loan. If you don't have a track record of credit, non-traditional trade lines can be used.

DISADVANTAGES:

* SOME SELLERS FEAR FHA APPRAISALS:
There are some sellers and real estate sales people who would prefer not to sell their homes to buyers seeking new FHA loans. This stems from past appraisals which were lower than the sale price or had extensive repair requirements. While the appraisals still may be a roadblock in some areas of the U.S., FHA now uses independent "fee" appraisers rather than FHA "staff" appraisers, which has eliminated many of the discrepancies.

* If you have 20% downpayment funds, FHA upfront Insurance premium (1.5% of the loan amount) & Monthly Mortgage Insurance is not needed.

In short, if there is 20% or greater down payment or equity in the house (property), then a conventional loan is the way to go.

If there is not the 20% or greater equity, then an FHA loan is the most likely option to go.

Since the inception of FHA loans, FHA loans are the most popular loan product in the United States today. Underwriting guidelines for FHA are the most friendly guidelines out of all loan products. They are what the sub-prime use to be when it comes to the the loan that is the easiest in qualifying for a home mortgage loan.

So if you are wondering if you can qualify for an FHA mortgage, odds are in most peoples favor that they will qualify, subject to:
You can show tax returns for the past 2 years.
You have held a job for 2 years.
Your debt doesn't exceed greater than 48% of your gross income.
You don't have any judgements or tax liens.
Collections aren't greater than $1,500

If you already have an FHA loan, now is the time when rates are excellent to have us help you save thousands of dollars a year and save tens of thousands of dollars in interest on your mortgage expense over the life of the loan.

Why pay your house off in 25 or 28 years on your original 30 year loan when we can help you restructure your loan and pay your house off in 15 to 22 years if not sooner just by paying the same amount that you are paying today and last month.

Let us help you do this now, don't procrastinate 2 months or 6 months or a year.