The Kestner Team

Sales Tips: 10 Reasons to Finance With FHA

Many homebuyers are realizing the advantages of FHA loans, but many more are still learning and looking to their mortgage sales professionals for guidance. When your customers are considering whether FHA may be the right loan for them, be sure to mention these 10 reasons to finance with FHA:

1. Increased Loan Limits – FHA loan limits have increased from $200,160 - $362,790 to $271,050 - $729,750 (in high cost areas), making FHA a financing option for more borrowers. In the Louisville MSA the maximum loan amount is $302,500 single family.
2. Easier to Qualify – FHA provides the mortgage insurance for FHA loans. Therefore FHA is able to be less restrictive with loan parameters and guidelines than may be available for conventional loans.
3. Mortgage Insurance – FHA charges mortgage insurance up-front (UFMIP) borrowers are able to finance this into the cost of their loan.
4. Low Down payment – FHA requires as little as 3% down payment, and the entire amount can come from a family member, employer or charitable organization.
5. Cash-out Refinances – On FHA loans, Cash-out refinances are available up to 95% LTV where conventional products are limited to 90%.
6. Less than Perfect Credit – Borrowers with credit problems, such as bankruptcy, may have an easier time qualifying for an FHA loan than for a conventional loan.
7. Income – There is no median income requirement or geographic restrictions on FHA loans.
8. Risk Based Mortgage Insurance Premiums – Beginning in July 2008, FHA will begin differentiating borrowers with higher FICOs by lowering their up-front MIP premiums, effectively reducing their monthly payment.
9. FHA Secure – In 2007, FHA released FHASecure, a program designed to help families who have become delinquent on a mortgage due to ARM resets keep their home. In July 2008, this program will expand to include any borrower having difficulty making their mortgage payment. By the end of 2008, FHA will have helped as many as 500,000 families stay in their home!
10. HUD Home Purchase Incentives – In many states, HUD in conjunction with FHA offers an incentive to buyers who purchase a HUD home, such as a $100 down payment in lieu of the standard 3% requirement. Contact one of our Mortgage Specialists for a list of special offers.