FHA Home Loan Myths
Our industry seems to be full of well meaning people with varying levels of knowledge and information who just don't always have the right answers.
Through using a variety of sources for information, many home buyers and loan representatives can become confused about what is and is not fact.
Given this, we've dedicated this page to setting the record straight on various industry FHA myths that we know are false! This page will continue to grow as we come across inaccuracies.
If you have a "low" credit score, you can expect to pay a much higher rate. (See what a multimillionaire and famous financial advisor said!)
- WRONG! Mortgage originators have assisted clients with credit scores as low as 500 to 550 who have consistently received interest rates ranging from .25% to .5% above the available conventional mortgage rate on a 30 year fixed note. Typically, standard FHA rates are about .125% higher than the rates people with a 620-720 credit score would receive using comparable conventional financing. Can you imagine how much money this type of BAD information costs borrowers every year?
You must be a first time home buyer to get an FHA Loan.
- NOPE! You do not need to be a first time home buyer to get an FHA Loan. As a matter of fact, there are no income restriction either!
It costs more to have an FHA loan compared to a conventional loan
- WRONG! FHA is designed to benefit and protect home buyers. This is why you see limits on the type of loans offered for insurance by FHA. If you are credit challenged, there is no doubt that an FHA loan will save you money. If you have "A" credit and a limited down payment, FHA will save you money.
You must have a "decent" credit score to get an FHA Loan.
- NOPE! HUD Guidelines do not require or consider credit scores as a part of the underwriting process. Only credit quality is given consideration.
Have question? Send it in using the contact page and we'll get you the right answer fast!