A 30 second anatomy of an FHA loan –
What you NEED to understand…
FHA loans have two major advantages.
#1 – they allow a purchase loan with only 3% of borrower’s funds in the deal. These funds may come from allowable sources such as mom and dad, employer, church. They also allow up to 6% seller help.
#2 – They allow cash out refinances to 95% of the value of your house – for now anyway.
The myths - FHA loans are for poor people or clients with terrible credit. NOT TRUE!
Think about it. FHA will allow you to purchase a home with NO MONEY out of your pocket. And FHA offers JUMBO loan amounts as well. FHA is the ONLY program that will allow cash out at 95% loan to value. FHA is the hottest loan program on the market!
FHA has mortgage insurance --- ok, so what.
Conventional loans over 80% loan to value do as well and the factors are much higher than FHA, which means on loans over 80% loan to value, an FHA loan payment will typically always be lower.
If you are looking into a loan and someone is advising you against an FHA loan, seek advice elsewhere. Understand your options.
FHA experts
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