Illinois FHA Loans Have Grown In Usage Greatly

Oct. 31, 2012 - PRLog -- Although the FHA mortgage has been around for over 70 years it was only recently that they became popular with home buyers. Thanks to a few changes, and increase in loan limits, the FHA loan has grown in usage greatly since 2005. There are quite a few benefits for buyers to using an FHA loan for a purchase or a refinance.

Good for Borrowers with Prior Credit Problems

One of the most appealing qualities of the FHA loan is the fact that people with less than perfect credit can qualify. A general rule of thumb is if the last 12 months of credit history show prompt payment history without incurring too much new debt most people will qualify. Former bankruptcies are ignored if the discharge date was at least 2 years ago. Even former foreclosures are ignored if it happened at least 3 years ago.

Generous Loan Amounts

The highest allowed FHA loan is over $700,000 in most places. This means that the vast majority of first time buyers and middle income families should be able to find a home that suits their needs in this price range or lower.

Less Stringent Requirements for Home Condition

There was a time when home sellers were willing to drop the asking price of their home if the buyer would use a loan other than an FHA mortgage. That was due to the strict condition requirements necessary to pass the inspection of an FHA appraiser. However, the majority of those rules have been changed to make the appraisal process easier and more flexible.

Rates as Good as Other Loans

In the past, FHA loans might have had a mortgage rate that was 0.5% or more than a conventional loan for the same amount. Those days are over. Now the FHA rate is usually the same or maybe only 0.125% higher, at the most.

Visit our FHA Loans page for detailed program information: https://www.madisonmortgageguys.com/programs/government/f...

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