FHA Mortgage: Pros and Cons

4 minute read By Jason Gelios REALTOR®

FHA is a great option for home buyers who are looking to put a smaller down payment on a home while obtaining
​a great interest rate. Like everything else in life, there are pros and cons to this type of mortgage.
 
Here are some pro’s and con’s of obtaining an FHA mortgage.
 
FHA Pros:
Low down payment requirement: 3.5%
Gift funds may be used for the total down payment
Lower credit scores are acceptable
Easier to refinance with streamline process
Higher debt to income allowed
Can be assumable
Easier to qualify for
Home sellers can contribute up to 6% towards your closing costs
 
FHA Cons:
Purchase price must not exceed your loan limit
FHA has more paperwork
Mortgage insurance is higher compared to other loans

FHA has more pros then cons and can be a great option to allow potential home buyers to get a mortgage to purchase a home. Always work with a well experienced loan officer to see if an FHA mortgage is best for you.