10/13/2010 It's well known that an FHA mortgage can save you a lot of money on your home purchase and get you into a new home that much faster. We've provided a brief recap of some of the most rewarding benefits of the FHA mortgage program.
1. No loan limit. Some conventional mortgages come with loan limits. Not FHA mortgages. It's true that there is a cap on the value of the property you can purchase with an FHA loan, but beyond this, there is no actual loan amount limit. FHA mortgages are flexible in this way.
2. Minimal down payment. This is considered the greatest benefit of the FHA mortgage. First time home buyers who qualify can get into a home with as little as 3.5% of the purchase price down. This is hugely helpful for buyers who don't have much cash saved up. The FHA does require that the down payment be delivered in cash and not in the form of a second loan., but 3.5% is much easier to come up with than the 20% or more that conventional lenders expect to see.
3. Low mortgage rates. FHA mortgages come at some of the best mortgage rates available. Mortgage rates are low all across the nation right now, for all types of loans, but FHA mortgages are among the best. Check with your local FHA lenders to see what mortgage rates are available to you.
4. Seller concessions. The FHA allows your seller to pay for all or a portion of the closing costs of your mortgage deal. In a seller concession, the seller provides you a financial "gift" that you use to pay for closing expenses. This money is then rolled into the total cost of the loan itself.
5. Easy refinance opportunities. An FHA mortgage provides you access to the FHA Streamline Refinance program, which allows homeowners to refinance their mortgages without the usual hassle and paperwork associated with refinancing. Many homebuyers already expect that they'll need to refinance a few years down the road, and an FHA mortgage can greatly ease the stress involved with this.
