The Good and The Bad – A look at FHA Loans in 2017 | |San Diego Home Loans- Laura Borja

What is an FHA loan? That is what we're going to be taking a look at in this week's the Mortgage Minute Music

The Mortgage Minute presented by me, Laura Borja Your San Diego home loan expert What is an FHA loan? An FHA loan is a loan that is insured by HUD or the Department of Housing and Urban Development It is meant for the purchase of owner-occupied properties, primary residence is only, however you are able to purchase a multi-unit property let's say a duplex Where you would live on one side and rent at the other The underwriting guidelines of an FHA loan tend to be much more relaxed as compared to conventional financing

Credit score requirements are not astringent and debt to income ratio can be a little higher than compared to a conventional loan They do requrie a minimum of 35% down both upfront mortgage insurance as well as monthly mortgage insurance And speaking of monthly mortgage insurance that is one of the downsides of the current guidelines for FHA Which say that unless you put at least 10% down then you are going to be stuck with that monthly mortgage insurance for the entire life of the loan There is no possibility of getting it removed regardless of the equity in your property The other slight disadvantage is that if you are trying to purchase a condominium, the condominium project must be on the FHA approved list

That list is getting smaller and smaller Many developers don't go through the process of getting the project approved so that means that if the home, the condo you're trying to purchase was not approved by the developer or Builder, the only way to finance a using FHA financing would be for you to get the entire project approved which is can be a very lengthy and costly process So there you have it A quick look at FHA Loans If you have any questions about that or any other by all means reach out to me Email me Give me a call send me a text or connect me through social media thanks for watching this week's the mortgage don't forget to subscribe and I'll see you next week

Source: Youtube

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