Justin Perry's Mortgage Blog

      The most common question I have been receiving lately from my clients is, "What mortgage programs are left?"  Of course if you have excellent credit and a 20% down payment the world's doors are still open to you and just about any bank with money to lend will be happy to extend you a mortgage.  But what about people who either don't have a 20% downpayment or they just don't want to put all their savings into their home in the form of a down payment?  FHA!  It is still the best product available.   There are so many great things about FHA mortgages but let me start with the negatives:

• There are loan limits specific to each town/county.
• If the property is a condo it must either be on the approved list or you need to get a spot approval.
• The home must be free of chipping lead paint and must be in reasonable condition. (who doesn't want that?)
• An FHA appraisal is require which costs about $100 more than a standard appraisal.

Now for the positives for FHA:

• Only about a 3% contribution is required and that 3% can come from a family member or close friend.
• The FHA monthly mortgage insurance is about 60% less than what you would expect to pay on a conventional loan.  And thats assuming you can even get a conventional mortgage,  which even with 10% down is not easy right now.
• There are no income limitations like with most bond-backed state programs like Mass Housing.
• You can still qualify for the first time homebuyer tax credit unlike state programs like NH Housing.
• The upfront mortgage insurance can be financed into the loan.
• You can use an FHA mortgage loan to buy a 1-4 unit property.
• The 30 year fixed rates on an FHA mortgage are typically better than what you can get on a conventional loan with 20% down!
• FHA offers the streamline refinance which allows you to refinance down the road with no appraisal, no credit check and no verifying income or assets.

As you can see the benefits of FHA mortgages heavily outweigh any negatives.   If you or someone you know would like to learn more about whether or not an FHA loan is right for you please call or email me anytime.