Ask Val

August 9, 2010

FHA Mortgage, What is the attraction?

Many times I am asked why is a FHA mortgage better than conventional?  In fact, there are many  advantages to FHA financing.

FHA insures the mortgage which reduces the risk a lender has to assume in the event a borrower defaults on the mortgage payments.  Insurance  allows lenders a little more willingness to loan to those with not so perfect or less depth in their credit history.  This helps  individuals qualify for financing.

FHA’s underwriting standards are less strict than those of conventional loans.  This allows individuals who have had credit issues, bankruptcy, foreclosure or inconsistent payment records the opportunity to qualify for financing.

Also, FHA will allow a minimum down payment to be as low as 3.5%.  These funds can come from the borrower, co-borrower, or in the form of gift funds.  Gift funds may be given from a parent, grandparent, fiance’, sibling or god-parent.

In today’s market if you are purchasing a home below $271,000.00 and putting less than a 20% down-payment, it may be in your best interest to have a FHA loan.  Rates are low and FHA may be assumed if qualified and monthly mortgage insurance is generally much lower on an FHA mortgage.

If you have questions or would like to be pre-approved to purchase a new home or refinance your existing, please visit my website www.vshomeloans.com or call me at 205-995-7283 x 304.  I would love to help with one of the largest financial decisions you will ever make.

Yours to Count On,

Valerie Springer    NMLS 198479

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at WordPress.com.

%d bloggers like this: