Even if you have a bad credit score and your low monthly budget, you might have limited choices. This means you’ll try other options, such as an FHA mortgage. However, the FHA mortgage has some advantages and shortcomings. More can be found here.
Benefits of FHA Mortgage Loans
- Lower minimum credit scores than traditional loans
- Down payment as lower as 3.5%
- Allows a better debt-to-income ratio of 50%
Disadvantages of FHA Mortgage
- FHA loan insurances lasts a complete term of the loan with a less than 10% down payment
- The home must meet the strict safety and health standards
- The program Doesn’t have jumbo loans. The mortgage amount can’t go beyond the conforming limit for the town.
While the federal housing administration sets the standard prerequisites, the FHA approved lending institution’s requirements might be different. Additionally, the FHA fees and interest rates vary by the lender. For this reason, doing a comparison shop is vital. Having an FHA pre-approval from at least three lenders can assist you to compare the mortgage cost. See also about How to Qualify for an FHA Loan.
View Mortgage Broker Phoenix in a full screen map