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FHA is a great program and it is not good for everyone. I will always try to get my clients approved with a Conventional product before looking into FHA.  Why you ask?  Conventional rates and programs will be cheaper in the long run and more beneficial to you, my client.  Once we get a decline, we can go the FHA route.

FHA offers great rates to people with not great credit.

Here are 2 scenarios that I want you to hear about.

1.  A couple came to me and they were in a lot of debt (over $50k) and they were struggling to pay their bills.  Their credit was not very good shape (right around 600) because of the amount of debt etc.  They could not qualify for a conventional loan.  We then, turned to FHA, did a Cash out refinance to 97% of the value of their home, got them a rate under 7% and away we went.

They have now paid all of their credit card debt off and are saving over $700 per month.  Their credit rating jumped up immediately (680 I believe) and now they can qualify for any Conventional Mortgage.

That was a WIN WIN for all involved.  Some Mortgage Reps would have taken them into the Subprime market and gave them a rate of 9-10% with a lower LTV and ultimately put my client in harms way.

2.  We keep hearing that the Industry is in shambles and that there are no loans for people with poor credit.  As you have heard me say before, they are just not telling the truth.

Just 2 months ago, I got an approval for a couple, through FHA, that had a 563 credit score.  The loan was for only 3% down.  The rate was also at 7%.  Does that sound bad to you?  I think it is incredible and proof that the media tells you what they want you to hear.

Please call me or send me an email if you have questions.  Again, the facts are not being told and I am here to help!