Conventional Financing vs. FHA

                     Why more and more applicants are turning to FHA

Most applicants are overwhelmed by the amount of financing options. The most popular options are FHA and  conventional.
FHA was developed by the Federal Government to establish affordable financing for qualified borrowers. FHA has the ability to not only insure the loan, but also limit the lenders risk. Usually the borrower pays an insurance premium which is roughly 2.25% of the required loan amount.  This money can be financed straight from the loan amount. In addition, the borrowers will need to pay a monthly premium of .55% of the loan divided by 12 months and the FHA requires down payment of 3.5%.  This may sound like a lot, but the benefits on FHA are still very good.

A  major benefit of this is the money can be a gift, and no reserves are required, and qualifying is much easier. Higher debt to income ratios, Credit scores to qualify are significantly less that conventional mortgage loans.  Lots of advantages

Most people are familiar with is the conventional style mortgage. Applicants usually are those with excellent credit, job stability with reasonable income, a sizable down payment, and low debt to income ratios.

Many of the homes in Contra Costa County qualify for FHA financing.  Local and National lenders have become very good at funding these loans too.  FHA is a very good way to buy a home.  I hope you explore these opportunities.