What are the Pros and Cons of an FHA Loan?
Im a first time home buyer in Los Angeles and do not have 20% down payment to buy a home. I qualified for an FHA fixed rate loan at 4.8% for 30 years. I am considering buying a home for $400,000 which under FHA rules i will need to pay $14,000 down and of course closing costs.
For those of you who have bought a home with an FHA loan... What would be the pros and cons of this loan?
Thanks in advance for all your help i appreciate it
- chatsplasLv 71 decade agoBest Answer
FHA has loans with minimum down payment of 3.5%, although 5-10% down is better. You have very limited equity interest in your new home. If you get $8000 first time home buyer's credit, put all or most of the money as extra principal payment, and it will GREATLY reduce amount of interest you pay over life of loan. Harder to buy some condos, or homes with prices too high or too low.
Sometimes you can get sellers to pay closing costs, or part of them.Source(s): tax pro
- roggemanLv 43 years ago
professionals: lengthy time period low fastened expenses decrease credit or sub best borrowers can qualify Can borrow over the common 80% LTV Cons: homes will require more suitable inspections the living house itself has to qualify lots of place of work artwork