Easier to Qualify - FHA insures the mortgage, lenders are more willing to give loans with lower qualifying requirements so its easier to qualify your borrowers.
Less than Perfect Credit - Credit Problems even a bankruptcy, its easier to qualify your borrower for an FHA loan than a conventional loan.
Low Down payment - FHA has a low 3% down payment, and other loans don't allow this.
Costs Less - Many times, FHA loans have competitive interest rates because the loans are insured by the Federal Government.
How do FHA loans compare to conventional loans?
Conventional loans usually require a larger down payment. And, if your borrower has less than perfect credit they may not qualify for many conventional loans and you will be stuck offering a loan with higher interest rate and/or fees or not doing the loan at all. is compare the cost of the conventional loan to an FHA loan line-by-line. What are the fees on each? What is the interest rate? How much is the mortgage insurance on each? How much down payment is required? For some borrowers, a conventional loan may be less expensive. For many others, it will be more expensive than FHA.
Many loan originators have suffered a dramatic loss in income as a result of the sub-prime market shifting back to a more traditional underwriting model.
Become a savvy loan originator and turn all your old sub-prime files into money and qualifying these borrowers on an FHA Mortgage Loan.
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