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FHA loans are NOT just for first time buyers…

FHA loans are backed by the Federal Housing Administration (FHA), which is an agency under the jurisdiction of the department of Housing and Urban Development. FHA loans are insured by the FHA which just means that organization protects your lender against loss if you default on your loan.

Now that we know what an FHA loan is, lets’ talk a little about today’s episode. Lori shares some big pros and cons of using an FHA loan. Let’s talk about a few but to get all the details make sure to tune into episode 121!

Here are a few pro’s for our potential FHA users:

1. A lower credit score which means many buyers will be able to buy a lot sooner.

2. NO income limitations

3. FHA loans allow buyers to have a higher debt to loan ratio which means you can borrow more.

*** Lending guidelines tend to change all the time so keep that in mind when starting your home buying or selling expereince and be sure to have conversations with your real estate agent AND your lender ***

Now for a few CONS:

1. Buyers will be required to pay for a private mortgage insurance when there is less than 20% put down.

2. There will be limitations of WHERE you will be able to buy. Some locations,, communities or the home itself will be exempt for allowing FHA loans to be used.

3. Property standards will need to be considered safe and “healthy". This does not exactly deem as a negative aspect because if the buyer is using an FHA loan, it may also mean that same buyer does not have the extra money or income to fix the unsafe standards or issues with the home.

Something else to consider as a SELLER:

Sellers may not want to approve an FHA loan buyer due to the age and conditions of the home.

OR

The seller SHOULD fix issues so they don’t loose out on any of the potential offers since there are A LOT of FHA buyers out there right now.

Lots more information on episode 121 podcast so make sure to tune in!

See You next week for a new episode!

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Disclaimer: Please verify all information with the licensed professional of your choice.