FHA loan

2 Replies

what probing questions would you ask mortgage broker that claims he knows the FHA process well ? Before I accept an FHA offer I would want to know the mortgage broker knows what they are talking about.

1.) "Do you do a 203k loan?" This is a rehab loan that can be added to the FHA loan. Most banks don't do these as they are a lot of paper work so don't be surprised if they say no. I'd be a little apprehensive if he/she doesn't know what the 203k is.

2.) "Could you tell me a little about the FHA guidelines regarding the condition of the property?" FHA guidelines are very strict about the condition of the property. Stairs must have railings, can't have peeling paint, etc. Its a very thorough inspection compared to a traditional loan.

3.) "Can you compare the FHA loan with the PMI (principal mortgage insurance) with a traditional loan on the same property? I'd like to see if the FHA is worth the extra cost of the insurance." FHA gets you in at a very low down payment and the rates are quite good right now - but you end up having to pay PMI. This is the banks insurance that they will get some back if you fall behind on your payments. Ask more about the PMI to get more information. When the PMI is added to the cost of the loan sometimes its close to what you would be paying with a traditional loan.

4.) "Are there any other programs that have a low money down?" Someone who works with FHA loans is generally going to know any other programs that have popped up.

5.) "Do you know of any down payment assistance programs in the area?" Often times, there are local programs that can help provide down payment assistance but they aren't advertised very well. Again, if its someone who works with FHA loans consistently I would hope that they know of some of these programs. If not, you can probably find them on your local city website somewhere.

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