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Pros
- Low down payment
- Down payment may be gifted
- Low interest rate
- Seller or third party may pay buyer's closing costs
- Loans before December 1, 1986 are simply assumable
- No prepayment penalty
- Qualifying guidelines less restrictive than conventional
- Lender is insured against loss
Cons
- Loans after Dec 1, 1986 are not assumable without qualifying
- Loan origination fee
- Buyers and Sellers pay discount points and other costs attributed to
FHA loans
- MIP required
- Appraisal guidelines may be more stringent than for conventional
- Loan processing may take longer
- Seller may be requested to pay fairly heavy costs to assist buyer,
seller may, therefore, want to sell at full price
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