Disadvantages of FHA home loans

Category: Loans

BuyingHome
Taking out a mortgage is a huge decision, and with all the different options out there, it’s not one to be taken lightly. Although an FHA home loan can be a good option for some homebuyers, it is also important to take some of the following disadvantages into consideration:

Qualifying

Even though it’s easier to qualify for an FHA home loan, this doesn’t mean all applicants will automatically receive financing. When it comes to credit, for instance, an individual with a decent credit score might not receive financing if there are certain red flags on their credit report. 

Extra costs

If you are approved, there is still another catch to consider—the extra cost of mortgage insurance. Unlike traditional mortgages that may require borrowers who put down less than 20 percent to pay a monthly premium, borrowers who take out FHA loans must pay two separate mortgage insurance premiums. Aside from a monthly payment, borrowers must also pay for a premium upfront, but these expenses can sometimes be rolled into the loan.

Home requirements

Finally, it’s not just the borrower that needs to get approved—but so does the home the borrower wants to purchase. An FHA-approved appraiser must look at the home first, and it must meet specific condition requirements.

Are you receiving structured settlement payments, but you sometimes feel that they’re not enough? The long-term payment schedule that a structured settlement offers can be quite limiting, and it can take a long time to save up enough cash to accomplish larger goals. For example, if you want to purchase a home, you’ll usually need a down payment to qualify for a mortgage. You may be getting money periodically from your settlement payments, but the only issue is that you receive smaller payments that don’t give you the cash you need.

But this is how Peachtree Financial Solutions can help. We can purchase some or all of your future annuity payments and by doing so, offer you that money now in one lump sum. You may be able to use that money to pay off debt and improve your credit score, which can be very helpful prior to applying for a home loan, or you can your lump sum of cash for your down payment. Depending on the value of your payments, the amount you choose to sell, and the price of the home you want to buy, you might even be able to purchase your home in cash and without taking out a mortgage. Contact Peachtree Financial Solutions today to learn more and to get started!

Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.

Tags: Buying a Home, fha loans, mortgages

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