FHA Loans are not just for those who can't qualify for conventional financing
I recently ran across an excellent article in Inman News entitled For Your Clients: 7 Things All Borrowers Should Know About FHA Loans.
The article lists seven features of the FHA loan product that are often misunderstood, ignored or mis-represented when reviewing financing options with our clients. For those of us that work with first time homebuyers or act as exclusive buyers' agents, it is incumbentupon us to make sure that our clients understand the "basics" about various loan programs so that they can discuss these options with one or several lenders to find the best product for them. For instance, if your client is buying their first home with their fiancee and it is a 600 sq foot studio loft in the Downtown area of your city, what is the likelihood that they are going to still be living there in 5 or 7 years? Instead of looking at 30 year fixed rate mortgages right now, they should probably be looking at 5-7 year ARMs which currently offer lower interest payments. Even though your client has the capacity to put 20-25% down at closing - maybe the better answer is to encourage them to look into the low down-payment feature of and FHA loan. These questions are, obviously, best answered by your client's accountant or loan officer, but we also have a role in making sure that our buyer clients are well-informed so that they can ask the right questions.
What about someone looking to sell their home. How many of us have asked what kind of interest rate and loan product that they currently have? FHA loans are often times assumable. Therefore, this might be an interesting marketing feature to attract new buyers.
Read the article here, and share it with your clients, customers, agents, and friends.
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