FHA Loans Have Become Costly
There was a time that an FHA loan was most sensible for buyers with a small down payment; however, after April 1, 2013, that time has passed. The Federal Housing Administration just increased their fees for the third time in two years.
At this point, a qualified borrower who puts 5 percent down on a 30 year $170,000 mortgage could save $4,000 in only five years by choosing a conventional loan over FHA.
If you’re looking to purchase and contemplating an FHA loan vs. conventional, check with a local mortgage company who can calculate your fees and mortgage insurance in the two scenarios. You may be surprised which is more cost effective!