FHA Loan

[Mark Smith]

So here is a bit of my story to help explain my thinking. I received my master's degree in May, 2014. Along with that came student loan debt...awesome! I have a good job, but student loan payments really take up a lot of that cash flow. Since I have began my real estate research, I have come across and learned a bit about FHA loans. I'm hoping to hear from those who have used FHA loans. I plan to live in my first property, so we can check that piece off the list! With such a small amount down (3.5%), I would expect to pay a higher interest rate, is this true? Are all FHA loans 3.5% down, or is it 'as low as' 3.5% with the possibility of the percentage down being greater? How difficult is the approval process? I've also seen 203k loans that can be added on for repairs, so I would love to hear from those who have taken advantage of them as well.

Thank you for any input!

[Upen Patel]

@Mark Smith Here is the skinny on FHA loans:

* Down payment - 3.5% down min - you can do more, but it does not help with rates
* Funding fee - 1.75% FHA funding fee to be paid at closing. This can be rolled into the loan, so you don't have to come up with this money if you don't have it.
* MI - You will have a monthly mortgage insurance. No way to avoid this.
* Interest rates - FHA interest rates are usually lower then conventional loans, though I don't see this as a big advantage.

There are conventional loans that you can get for multi-family properties that might make better sense. It all come down to your credit, financial and the loan size, to determine which loan is the best option. A good mortgage banker should be able to help you with this.

Good luck.

Upen Patel

Mortgage Banker

Federal NMLS# 1374243