Top Myths About FHA Government Home Loans is a post from: FHA,VA and Conventional Home Loans in all 50 States

There are a lot of myths out there about FHA Home Loans out there that are NOT correct.  A lot of these myths are put out there by Realtors representing sellers (especially on banked owner REO’s) who really don’t understand FHA Loans.

Myth #1 FHA Loans Are Only for First Time Home Buyers:

Anyone can get a FHA Loan; you do NOT have to be a first time home buyer.  But you can only have one FHA Loan at a time and you can only get an FHA Loan on a primary residence.

Myth #2 FHA Loans take more time processing:

FHA Loans do NOT take any more time to process than a conventional loan.   There is nothing about them that would take them any more time to process than a conventional loan.   You can close on your new house with a FHA Loan just as fast as or faster than if you were to get a conventional loan.

Myth #3 More paperwork is required

There is no more paperwork involved in a FHA Loan then a conventional loan.  Both will require standard income, asset, property and credit documentation.

Myth #4 Interest Rates are Higher on FHA Loans

Interest rates on 30 year fixed FHA Loans are just as competitive as conventional loans, if not sometimes better.  In fact FHA does not penalize borrowers for lower credit scores as much as conventional loans do.

Myth #5  FHA Loans Are Too Restrictive

The opposite is actually true!  FHA Loans have more flexible credit and asset guidelines then conventional loans, (especially when a borrower is putting less than 20% down on a conventional loan).  Also, FHA Loans also still allow the mortgage company to choose the appraiser.  This means you are more likely to get an appraisal done by a local professional vs. conventional loans that require appraisals through the HVCC process which often assigns inexperienced out-of-area appraisers working for low wages.

Myth #6  FHA Loans Require Termite Clearance Reports

If the buyer does not ask for a pest inspection in the purchase contract, they will not be required to get a clearance for a FHA loan. 

Myth #7  FHA Loans Have Low Limits on Maximum Loan Amounts

You can get an FHA Loan all the way up to $729,750 in many areas of the county.  This is the same as the upper limit for conventional loans.

So there you have it.  Seven Myths about FHA Loans that are not true!  Please don’t hesitate to call if you have any questions.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

rob@affinity-financial.com

858-922-7899 (direct)

FHA Loans and Termite Work is a post from: FHA,VA and Conventional Home Loans in all 50 States

Most older houses have some level of termite damage that exists in the house structure.   And most purchase offers made by buyers call out as a condition to their offer that the buyer will do a pest inspection and the seller will be responsible to fix any section 1 termite damage.  Section 2 termite damage is more serious and not generally paid for by the seller, but of course can be negotiated to be cleared by the seller.

In the old days of FHA loans you had to get a termite clearance before the lender would fund your loan regardless of whether you called for a termite inspection in your purchase contract or not.  But these days if you do not ask for a termite inspection in your purchase contract, you will not have to get a termite clearance to get the FHA loan.

Now if you feel that your seller will pay for the termite work, it can be helpful to call out the termite report inspection as a contingency of your purchase.  But if you feel the seller will not pay of the termite work, you may want to leave the termite inspection out of the contract.  Because once it is in the contract, you will need a clearance before you close.  And if the seller will not pay for the work, the buyer will have to pay for it.

If you have any questions about this topic or any other questions about FHA, VA or conventional home loans, feel free to email or call me.  My contact info is below.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer

rob@affinity-financial.com

858-922-7899