Advantages and Disadvantages of an FHA Loan

Realtors are busy! Busier than they've been in a long, long time. If you're a 1st-time buyer, this process can be quite overwhelming. There are so many options available, how do you know what mortgage is right for you?

We suggest you contact a reputable mortgage broker when you're first starting to go house-hunting. This way, you'll have time to review your options and even get pre-qualified.

To get you started, here are the key points to consider for an FHA loan.



Thumbs up:

• FHA loans are available to anyone.
• The down payment can be a gift.
• Low down payments can be as small as 3 to 5%.
• Less strict credit requirements.
• Sellers pay part of the closing costs.
• When you're ready to sell the house, these loans are assumable to a qualified buyer.

Thumbs down:

• The loan size has a cap on how much you can borrow.
• Requires a Mortgage Insurance Premium of 1.5%.
• If you're the seller, you'll have to pay some of the closing costs.

These are just the key points of an FHA loan. There are many other options that a mortgage broker can share with you. Next post ... Convention Loans.