FHA gives you more leeway than conventional loans, meaning if you are early in your career and are still paying on some student loans, an FHA loan may allow you to buy more house than a conventional loan would. Debt-to-income ratioįor example, a lender looks at a borrower's debt-to-income ratio – what you owe vs. While overall lending requirements are much tighter in the wake of the housing crash, FHA requirements are a bit less tight. The first is that it is easier to qualify for an FHA loan than it is a conventional mortgage.īecause it is a program to encourage homeownership, and the government stands behind the loan, a borrower may qualify with less than perfect credit. The loan has some advantages and disadvantages for the borrower. government guarantees to the lender that the loan will be repaid. If you qualify for an FHA mortgage, the U.S. GuaranteedĪn FHA loan is guaranteed by the Federal Housing Administration, part of the Department of Housing and Urban Development (HUD). Which is better will depend on your individual circumstances.

Now you have to select the method to finance your purchase, and for most first-time buyers there are two main options – an FHA or a conventional mortgage. You've finally found the right house in the right location for the right price and your offer has been accepted. You've spent months on real estate websites and toured dozens of properties.

Cost of a big mac 2015