"An FHA (Federal Housing Administration) home loan is one of the best ways to get a home if you have subprime credit or a lower income. You can read a brief description about FHA home loans on the government housing site here. An FHA loan is simply a loan that does not require mortgage insurance from a private company, because the loan itself is insured by the government. Typically monthly payments on FHA loans will be slightly cheaper than conventional mortgage rates. This also enables the FHA to extend certain perks to those with FHA loans, such as the 12-month extension"


sillycrap at 03:39 2011-07-17 said:
blogcritics.org does not what they are talking about.

most of the banks, ie Bof A, GMAC, Suntrust, and many more, want a 640 credit score for FHA loans - how des that equate to "a subprime loan"???

Now with the monthly mortgage insurance DOUBLED since Jan 2011, they havw almost killed FHA finacing. IT IS NO LONGER CHEAPER THAN CONV FINANCING by a long shot ! Permalink

cpruitt at 03:00 2011-07-18 said:
In reality, subprime means any score lower than what the big banks require for prime financing, so 640 is now a subprime score.

However, I agree with you about the article being inaccurate. FHA financing traditionally has not been less expensive than conventional financing. It has just been more lenient. The article also glosses over the fact that although FHA doesn't require mortgage insurance from a private company, the government doesn't just "insure" the mortgage with no cost to the borrower. FHA mortgage insurance costs are still added to the loan. Permalink

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