FHA Mortgages

FHA mortgages are an excellent alternative to conventional loans because they are designed to accommodate low money down options with lower credit scores. Another great advantage that in some cases they can handle a somewhat higher debt ratio.Here are some of the advantages and disadvantages of FHA.

  • An FHA mortgage only requires a 3.5% down payment.
  • The maximum debt ratio with an FHA loan is 55% compared to a conventional loan that is 49%
  • FHA can accommodate credit scores as low as 580.
  • Sometimes an FHA loan will yield a lower payment than conventional.We will do the math
  • Mortgage insurance needs to be refinanced off the loan unlike a conventional loan that allows the PMI to be removed when the mortgage balance reaches 78% of the value of the home.
  • Many Realtor listing agents do not like FHA offers because they feel the appraisal is scrutinized more.
  • FHA requires monthly mortgage insurance as well as an increase to the total amount financed in the amount of 1.75% to the base loan amount.
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