Edwardsville IL Homes for Sale and Real Estate : HOW DO I LOVE THEE FHA??? Top 5 Reasons to Consider FHA!

HOW DO I LOVE THEE FHA??? Top 5 Reasons to Consider FHA!

My blogging colleage Larry Bettag has written an enlightening post about FHA loans that I hope my readers will enjoy. 

Very often I find that buyers are under some misconceptions about who uses FHA and why. 

An FHA loan allows you to bring less money to the table and it is a great way to start out for people who are looking for their first home. But, do you have to be a first-time buyer to use FHA? No! 

If you're looking for a new home in Edwardsville, Glen Carbon, Collinsville, Maryville, Troy or anywhere in St. Louis' Illinois suburbs and you need a lender and a Realtor, just get in touch with me.  Together we can form a team that will get you into the home of your dreams.

Here's Larry's post:

There are many things that people should know about FHA loans. They're great for a variety of reasons, but I'm going to give you my list of favorite reasons for considering and FHA mortgage.

  1. First time homebuyers can generally come in with less of a downpayment. Truthfully, conforming or conventional loans generally want 5% down. FHA loans only need 3.5% down. How cool is that?
  2. The entire downpayment for an FHA loan can be in the form of a gift. There are gift restrictions as to who can give you a gift, but generally, if you're related, you can help someone out by gifting them the entire downpayment and closing costs. Borrowers can put zero of their own money into the transaction. You know that with conventional loans no matter what the borrower needs to put 5% of the purchase price into the transaction, unless the borrower were to receive a gift of at least twenty (yes 20) percent. Makes FHA so much more attactive.
  3. Credit scores and credit in general. - While FHA is slowly inching to mirror the credit requirements of conventional loans, for now, FHA still allows lower credit scores. In fact, scores alone, can't be used to make a credit decision. Also, when you're coming out of a Bankruptcy, FHA is so much more forgiving as to the time lines as to when someone can buy a house. Credit scores and credit requirements are so much more lenient with FHA.
  4. Non-Occupant Co-Borrowers- THIS IS A BIGGEE! I do this all the time. The borrower can have someone co-sign with them even if the person who is cosigning isn't going to live within the property. The loan gets qualified on the income and debt on the borrower and the non-occupant co-borrower together. And still only 3.5% is needed for the downpayment. On conventional loans, 10% down is needed and the borrower still needs to put 5% down against the entire transaction and still qualify for carrying a significant part of the mortgage payment. For FHA, the borrower can not be earning a penny all year, but so long as the borrower and non-occupant co-borrowers combine to qualify together, we're good to go! I have dads and mom buying homes with kids in college. The kid is the borrower and mom and dad co-sign. Do em every year out at Northern Illinois University.
  5. Appraisals - Appraisals used to be so difficult when going FHA. That's no longer the case. FHA, for the most part, mirrors those of Fannie Mae and Freddie Mac. They do also protect the borrower in that if there were substantial and material defects that would cost the borrower a lot of money in the first year of ownership to fix up, they'll address those issues, but the same can now be said of conforming loans.

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I help good people buy and sell good homes in St. Louis' Illinois suburbs, with special emphasis on the Metro East communities of Edwardsville, Glen Carbon, Maryville, Collinsville, Troy and surrounding areas in Madison County, Illinois.

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REMAX Preferred Partners is located at One 157 Center, Edwardsville, IL 62025, 618-791-8007 (direct) 618-655-1188 (office). We're easy to find on IL-157 in Edwardsville between Pasta House Co. and Shenanigans. Each office is independently owned and operated.

Comment balloon 2 commentsNancy Milton Holtzscher • May 23 2011 10:27AM

Comments

Nanc...thanks for the re-blog.  It's awesome to see that so many of the fears about FHA have been removed.  Grateful to have the re-post!!!!

Posted by Larry Bettag, Regional Vice-President (Larry Bettag - Cherry Creek Mortgage) over 6 years ago

You're welcome, Larry.  I just wrote an offer today with a buyer on a Freddie Mac Homesteps property. It was great to see these people so excited to be moving forward with home ownership. Reminded me why I do this for a living!

Posted by Nancy Milton Holtzscher, Edwardsville/Glen Carbon, Illinois Broker, REALTOR (RE/MAX Preferred Partners in St.Louis' Illinois suburbs) over 6 years ago

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