Comments on: Carnival of Personal Finance #118 http://thefinancebuff.com/carnival-of-personal-finance-118.html like a friend telling you about money ... Fri, 10 Feb 2012 17:31:35 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Salt Lake Mortgage Guy http://thefinancebuff.com/carnival-of-personal-finance-118.html#comment-241 Salt Lake Mortgage Guy Tue, 18 Sep 2007 13:58:00 +0000 http://blog.thefinancebuff.com/?p=162#comment-241 To answer your question about why everybody doesn't get an FHA loan.<br/><br/>1. FHA loans are profitable to the lenders that make them.<br/><br/>2. FHA loans are guaranteed to the lender. That's perhaps the biggest advantage to making them. These loans are highly insured to 20% of the loan value. The borrower pays the insurance, which can raise the upfront cost of the loan. Because of the low interest rates, over time, these loans are a bargain for the consumer.<br/><br/>3. FHA does have pretty narrow requirements for qualification. Bad credit has to be in the past. Income must be verified. Payment ratios are lower than some subprime loans. There are restrictions on appraisals. The biggest drawback currently is the loan amount FHA will go to. Congress is looking at raising loan amounts this week.<br/><br/>I hope this helps. Feel free to leave a comment on my post if you have further questions.<br/><br/>Nigel To answer your question about why everybody doesn’t get an FHA loan.

1. FHA loans are profitable to the lenders that make them.

2. FHA loans are guaranteed to the lender. That’s perhaps the biggest advantage to making them. These loans are highly insured to 20% of the loan value. The borrower pays the insurance, which can raise the upfront cost of the loan. Because of the low interest rates, over time, these loans are a bargain for the consumer.

3. FHA does have pretty narrow requirements for qualification. Bad credit has to be in the past. Income must be verified. Payment ratios are lower than some subprime loans. There are restrictions on appraisals. The biggest drawback currently is the loan amount FHA will go to. Congress is looking at raising loan amounts this week.

I hope this helps. Feel free to leave a comment on my post if you have further questions.

Nigel

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