Pros and cons of getting FHA from a conventional bank?

4 Replies

Hi everyone!

I am trying to figure out the difference, if any, from getting an FHA from a bank like Chase or a mortgage team/lender/small company? I have a good history with Chase, so I'm wondering if that would help, or if conventional banks tend to give lower interest rates than other sources? Thank you!

The larger banks are much harder. They are much slower, and more importantly they have additional overlays/requirements above and beyond what FHA requires.

@Hae-Yuan Chang , go with a local lender.  They will be much more willing to work with you, and you'll save yourself some money.  This is coming from a fellow 20-something who had a good history with Wells Fargo (checking account, savings account, business account, personal line of credit, business line of credit, and credit cards) and ended up going with a local lender for his 4-unit house hack using FHA 3.5% down financing. Your business means a lot to a local lender.  To Wells/Chase/BofA?  Hardly.  A 20-something seeking FHA financing for an investment property just screams risk and red tape.

But don't take my word for it.  Get it straight from the horse's mouth.  Read this article from less than two months ago and find the answer you seek. Here's a quote: "In an interview with CNBC, Kevin Watters, CEO of Mortgage Banking for Chase, said '...you're trying to make sure you abide by all these different rules, and it just gets very complicated, very expensive, so for us in FHA, we've priced FHA for the risk we see in FHA, and so we've got a higher price than other people so customers are going to other places.'"

Best of luck to you, Hae-Yuan.