advantages and disadvantages of FHA loans

FHA loans are a good option for first time home buyers. These loans are FHA approved so, you can get the loan on low interest rate. But, there are some advantages and disadvantages of FHA financing.

ADVANTAGES

1. Cash down pyment required is less as compared to other conventional loans.
2. Easy interest rates for you to buy a home.
3. No penalties if you pay all or part of the loan before the scheduled time.
4. Credit score is not a major factor to qualify for the loan.

DISADVANTAGES

1. FHA loans require that the home you buy must be your permanent residence. You cannot rent the home.
2. Approval time for FHA loans are longer as compared to conventional loans.
3. Maximum money you can borrow is less compared to conventional loans.
4. Monthly Insurance Premium (MIP) between 2-3% of the total loan is required.