Hal's Mortgage Blog

5.5 FHA Myths

Myth 1 - FHA has a list of "allowable closing costs" that limit the fees charged to the buyer; therefore the seller ends up paying for a lot of the borrower's costs.

Myth 2 - It's Harder to qualify FHA.

Myth 3 - FHA is only for low income or first time homebuyers.

Myth 4 - Because of the FHA MIP, the overall rate for FHA is higher than conventional loans.

Myth 5 - FHA is ONLY for high LTV loans.

Myth 5.5 - Many homes don't qualify FHA and/or they need repairs and inspections.

4.5 Quick FHA Secrets - Did You Know?

(1) - When using a non-occupying co-borrower, such as parents, the occupant borrower is not required to have any assets or income of his/her own.

(2) - 2 - 4 unit owner-occupied properties are eligible for 97% financing at the same interest rate as 1-unit homes.

(3) - Mom and Dad can lend, not gift, some or all of the money for closing, and put a second lien against the home that exceeds 100%LTV.

(4) - 15 year loans at 90% LTV have -0- monthly mortgage insurance.

(4.5) - FHA has NO declining market policy reductions in LTV. (Loans over $417,000 in declining markets use the lesser of two appraisals to determine value.

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Hal Tennant  MMC Mortgage  615.895.4265