While an FHA loan may be a lifesaver before you apply if you want to buy a home and have limited cash on hand or a not-so-great credit score, these loans do have some drawbacks you should be aware of.
- Really appraisal that is strict. The U.S. Department of Housing and Urban Development (HUD) has strict home appraisal criteria that exclude many properties from FHA loan eligibility. The house also offers to become your main or major residence, which means you can not utilize it as a good investment home (though FHA loans can be utilized for some multi-unit properties up to four units). Mobile phone domiciles as well as other dwellings that are prefabricated qualify, however, many condominiums are not able to.
- Mandatory mortgage insurance coverage. Borrowers with reduced fico scores are statistically very likely to miss re re payments or default on the loans than people with higher credit scores, so lenders require FHA borrowers to pay for home loan insurance coverage to mitigate the chance. Per FHA directions, the price of this insurance coverage is spread across two payment kinds:
- Just one bulk payment of 1.75% for the loan amount is born at closing. 続きを読む “Do you know the drawbacks of a FHA Loan?”