I can remember a time in the not too distance past when FHA was the ugly sister to the slick conventional mortgage products.
It made sense too. FHA is a fully documented loan and there are no corners cut when processing these loans.
I mean heck, FHA required the appraiser to actually go in the home. What? Forget that, "I wanna drive-by. Or better yet, no appraisal at all." I say that as I steeple my fingers.
The perception of the government insured mortgage was one of for first timers with poor credit and little down payment.
The benefit of the program was interest rates were roughly the same as the conventional products.
Even as early as the late '90s lenders began reducing restrictions on mortgage underwriting. This financial fiasco started long ago. It was not long after 2000 that even zero down conventionals were better than FHA.
I imagine the mortgage companies would like a redo at this point.
Of course, we all know what happened. The bottom dropped out, 100% financing went away, the sub-prime market is gone, and alt-A products are not even close to what they once were.
What hadn't changed with the reversal of fortunes was the general FHA underwriting guidelines. This is a great loan for all types of purchases, except investment properties. It is meant for primary residences.
Most conventional loans require at least 10% down now. FHA does and always has required very light down payment. To be more precise three percent is all that is required.
Additionally, FHA is pretty easy on credit as well.
The light credit requirements are of great help to those with lack of credit or others who hit a rough spot and are in the credit rebuilding process.
The economy of the last two years has affected many people's credit.
The truth is these loans have always been a great option. Now that conventional mortgages are far more conservative Fha is a great option.
The government loans keep chugging along and offer a great benefit.
It made sense too. FHA is a fully documented loan and there are no corners cut when processing these loans.
I mean heck, FHA required the appraiser to actually go in the home. What? Forget that, "I wanna drive-by. Or better yet, no appraisal at all." I say that as I steeple my fingers.
The perception of the government insured mortgage was one of for first timers with poor credit and little down payment.
The benefit of the program was interest rates were roughly the same as the conventional products.
Even as early as the late '90s lenders began reducing restrictions on mortgage underwriting. This financial fiasco started long ago. It was not long after 2000 that even zero down conventionals were better than FHA.
I imagine the mortgage companies would like a redo at this point.
Of course, we all know what happened. The bottom dropped out, 100% financing went away, the sub-prime market is gone, and alt-A products are not even close to what they once were.
What hadn't changed with the reversal of fortunes was the general FHA underwriting guidelines. This is a great loan for all types of purchases, except investment properties. It is meant for primary residences.
Most conventional loans require at least 10% down now. FHA does and always has required very light down payment. To be more precise three percent is all that is required.
Additionally, FHA is pretty easy on credit as well.
The light credit requirements are of great help to those with lack of credit or others who hit a rough spot and are in the credit rebuilding process.
The economy of the last two years has affected many people's credit.
The truth is these loans have always been a great option. Now that conventional mortgages are far more conservative Fha is a great option.
The government loans keep chugging along and offer a great benefit.
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