As the real estate market in Hampton Roads continues to stabilize, many buyers are considering purchasing a home with a FHA loan. Originally created to boost home ownership for moderate-income families, FHA loans offer low down payment guidelines and affordable closing cost. These benefits have positioned FHA loans as an increasingly popular financing tool for buyers of all income levels.
The Pros of Using FHA Financing:
- Flexible credit rating
- Downpayment, as low as 3.5%
- Up to 6% seller assistance
- Low closing costs
- Flexible income guidelines
- No prepayment penalties
- Fixed rates offered for both 15 or 30 year mortgages
- Loans that cover “fixer-upper” properties can include repair costs
- Refinancing programs available
- Reverse mortgage options
The Cons of Using FHA Financing:
- Required monthly MI (Mortgage Insurance) premiums are generally higher than conventional financing
- Required monthly MI is for the life of the loan
- The “Up Front Mortgage Premium is 1.75% of the base loan amount which can be significant even though it is financed into the loan
- Strict appraisal guidelines
It’s important to note, the FHA doesn’t make loans; all loans are made by private lenders, which are backed by the government.To further discuss the pros and cons of using FHA financing when purchasing a home in Hampton Roads VA, speak with your real estate agent or contact me directly today.
Pat Bowler | Market Leader & Mortgage Consultant
575 Lynnhaven Parkway Suite 101 | Virginia Beach VA 23452 | 757-652-3999
Movement Mortgage, LLC is an Equal Housing Lender. NMLS # 39179 | 877-314-1499. Movement Mortgage, LLC is licensed by the “Virginia Bureau of Financial Institutions” Lic # MC-5112. Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. “Movement Mortgage” is a registered trademark of the Movement Mortgage, LLC, a Delaware limited liability company.
NMLS license number 21095