Posted on: 27th Jan, 2010 04:42 am
1. they are easy to qualify for. because these loans are insured by the fha and not a local bank, it is easier for a person to get approved for this type of loan.
2. a person doesn't have to have perfect credit. if a person's credit is average or even below average, he/she can still qualify. a person doesn't have to have a perfect credit history to get this type of loan.
3. the down payment required of an fha loan is very low. for the majority of fha loans the down payment is a mere 3.5 percent. this makes it reasonable for most people to get a loan.
4. the interest rate for an fha loan is incredibly low. because of this rate, an fha home loan refinance saves the homes of many people. this loan is insured by the government, which allows lenders to offer such a low interest rate.
2. a person doesn't have to have perfect credit. if a person's credit is average or even below average, he/she can still qualify. a person doesn't have to have a perfect credit history to get this type of loan.
3. the down payment required of an fha loan is very low. for the majority of fha loans the down payment is a mere 3.5 percent. this makes it reasonable for most people to get a loan.
4. the interest rate for an fha loan is incredibly low. because of this rate, an fha home loan refinance saves the homes of many people. this loan is insured by the government, which allows lenders to offer such a low interest rate.
>>If a person's credit is average or even below average, he/she can still qualify.
That's true with a generic FHA-insured mortgage - that means without any "investor overlays". But most have a FICO overlay of 620 now, and it's rapidly increasing to 640. Additionally, a Mortgagee Letter was released last week that provided new guidelines for a consumer and a FICO of 580 or below. I was blown away when I read the letter because it's the first time I heard of FHA mentioning FICO scores.
>>A person doesn't have to have a perfect credit history to get this type of loan.
Again, with true FHA that's true. But show me a place where I can originate an FHA-insured mortgage with "pure" HUD
>>The interest rate for an FHA loan is incredibly low
I wouldn't say that ... I'd say it's competitive with "conforming mortgages".
That's true with a generic FHA-insured mortgage - that means without any "investor overlays". But most have a FICO overlay of 620 now, and it's rapidly increasing to 640. Additionally, a Mortgagee Letter was released last week that provided new guidelines for a consumer and a FICO of 580 or below. I was blown away when I read the letter because it's the first time I heard of FHA mentioning FICO scores.
>>A person doesn't have to have a perfect credit history to get this type of loan.
Again, with true FHA that's true. But show me a place where I can originate an FHA-insured mortgage with "pure" HUD
>>The interest rate for an FHA loan is incredibly low
I wouldn't say that ... I'd say it's competitive with "conforming mortgages".