Mortgage Land Prosperity

Some people who are home shopping consider the FHA mortgage due to income restraints or to separate themselves from some bad credit history that would stop a conventional mortgage application. There are those who apply for an FHA mortgage loan for totally different reasons. They may have a great credit history and are well qualified for income. Why would someone in that condition even bother to compare FHA vs Conventional?

Well since the FHA only insures the loan rather than directly providing funds it is entitled to be paid for the insurance. It can be as much as 1.5% of the total mortgaged amount but it is usually less than private mortgage insurance (PMI ) and unlike PMI can be stretched out into the life time of the loan. Add the low interest rates that the FHA can guarantee and there is reason enough to go FHA.

While an easier application qualification process awaits the FHA buyer, the well heeled borrower will find it hard to ignore the FHA down payment mandated at 3%. Just because your credit is good and you have the right income is no reason to go conventional and pay from 5 to 20% as a down payment. So don’t always think of the FHA mortgages as something for the credit challenged or cash disadvantaged. It is a great tool for all Americans to use to build, buy or refinance and remodel your dream house.

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