FHA Financing is not just for first time buyers. FHA financing can be used by anybody who does not currently have an FHA loan.
FHA financing is best for borrowers with limited cash, tight debt ratios, and/or credit issues. FHA is the most forgiving type of financing when it comes to all of these issues. FHA, therefore, remains one of the most popular financing options despite its very high mortgage insurance (usually 1.35% annually, and 1.75% up front).
Many qualified “High Balance” borrowers (seeking loans over $417,000) are forced to use FHA financing b/c they lack the cash required for the 10% down payment that Conventional financing requires. FHA only requires a 3.5% down payment.
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