The rates are lower and what's so bad about upfront MIP?
2007-11-06 09:43:46 · 5 answers · asked by videogamer1979 2 in Business & Finance ➔ Renting & Real Estate
The problem is that the lending institutions convinced the public that they could get extravagant mortgages now and huge houses, and pay for them later. They shoved ARMs and option ARMs and no doc, stated income, interest only garbage on people and they ate it up. Now that it's a problem, everyone wants to blame the middleman broker for giving people what they begged for. The truth is that brokers make more selling FHA guaranteed mortgages than any of those, but people didn't want that.
FHA mortgages are much too boring and safe. Who wants to actually pay for things they acquire these days?
2007-11-06 09:53:18 · answer #1 · answered by Anonymous · 1⤊ 1⤋
I think for most, it's a qualifying issue. FHA mortgages require a minimum of 3% down and the loan amounts are restricted on FHA mortgages. This isn't an issue in all areas, but for areas where the price of a home is above this limit it creates a lack of financing options with FHA. You can use the following link to look up the loan limits: https://entp.hud.gov/idapp/html/hicostlook.cfm
Another reason is there are other loan options. Fannie Mae has some great financing options for the buyer/borrower who can document their income. Their loans can go up to 100% of the purchase price or loan amount. Their loans are very secure....30 year fixed and they do not have a commitment period or pre-payment penalty.
All the best!
Ryan Smith
2007-11-06 18:18:36 · answer #2 · answered by Anonymous · 1⤊ 0⤋
First of all, the rates are only lower if your credit will not allow you to qualify for a Conventional loan. For an "A" credit customer, the rate on a conventional loan is most certainly lower than on FHA financing. Also, FHA loans always require mortgage insurance, whereas conventional loans do not. In the event that your credit is not up to the standards required for conventional financing, FHA is always a good option because the qualifications are more flexible. Lastly, many people cannot use FHA financing because there are limits on the loan amount depending on which county the property is in. In most cases, the loan limits range between $213K and $375K for a single faminly dwelling.
2007-11-06 17:49:47 · answer #3 · answered by Steve W 2 · 3⤊ 0⤋
Because of the tremendous amount of foreclosures and those who have been caught in the ARMs of yesteryear, it is very difficult to qualify for an FHA loan. The government does not have to give you a mortgage, nor does any other lending establishment. If you can prove that you're able to pay, there is no problem getting a loan or mortgage, but because of the recent downfall of the housing market, it is going to be very tough to get any credit. The foreclosures that you see on hour long infomercials, well, they are few and far between. It is rare that one will be able to buy a million dollar home for $10,000 and no down payment. In addition to the newly available properties, the values of the properties have dropped, therefore, one would have to pay the outstanding debt, which in most cases exceeds the value of the home, so even if you buy it, it will be a very long time before you make any type of return on that investment. I hope this is understandable, but I am trying to give you as much information as I can in as few words as I can. Enjoy.
2007-11-06 17:57:50 · answer #4 · answered by Hot Coco Puff 7 · 1⤊ 1⤋
Not everyone qualifies for an FHA loan.
2007-11-06 18:04:29 · answer #5 · answered by Josh 6 · 0⤊ 0⤋