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.
First timers could get, with FHA, a highly competitive interest rate loan. It even had lower down payment requirements than the conventional loan.
Over time, with easing of lender restrictions, FHA went by the wayside. Even the 100% conventional products were better than going FHA... At least from the borrower's perspective.
If the lenders could only take the last 10 years back.... I think they might.
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.
With all these wonderous mortgages biting the dust we still have government loans to fall back on. And they are just as good as ever for the purchase or refinance of residential primary residences.
The great thing about FHA, which has always been the case, is the down payment is very low. We currently see about a three percent down requirement by FHA.
From a credit perspective FHA looks more closely at on time payments rather than credit scores.
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.
A ton of folks have had their credit scores pummeled over the last 24 months.
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. - 20896
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.
First timers could get, with FHA, a highly competitive interest rate loan. It even had lower down payment requirements than the conventional loan.
Over time, with easing of lender restrictions, FHA went by the wayside. Even the 100% conventional products were better than going FHA... At least from the borrower's perspective.
If the lenders could only take the last 10 years back.... I think they might.
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.
With all these wonderous mortgages biting the dust we still have government loans to fall back on. And they are just as good as ever for the purchase or refinance of residential primary residences.
The great thing about FHA, which has always been the case, is the down payment is very low. We currently see about a three percent down requirement by FHA.
From a credit perspective FHA looks more closely at on time payments rather than credit scores.
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.
A ton of folks have had their credit scores pummeled over the last 24 months.
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. - 20896
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