Five Reasons To Consider FHA Loan

Government-insured (Federal Housing Administration) FHA loans now make up about 25% of the mortgage market. Here are five reasons you should consider an FHA loan, if you’re looking to purchase a mortgage loan:

1. Chances are good that you’ll come across one.
2. Borrowers can qualify with any income. Historically FHA loans have gone mostly to low-income borrowers. But, in fact, there’s no cap on what someone can earn.
3. Expect a tough appraisal. The home will need a clean bill of health from a government-approved appraiser, and the seller must fix any issues before a buyer can close on the loan.
4. These loans are pricier than they seem. Nominal rates on FHA mortgages are comparable to those on conventional loans. But hefty fees on the FHA variety up the cost.
5. They’ve gotten easier to obtain. FHAs once had a well-deserved rep for onerous paperwork and a longer, more difficult closing than conventional loans. But thanks to a new automatic underwriting system and the looser repair requirements, FHA mortgages take only a few days longer than conventional loans to close, says Bill Banfield, a vice president at Quicken Loans.

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