disadvantages of fha loan for sellers

4 Common Disadvantages of FHA Loans 1. Loan Limits. One of the biggest drawbacks with FHA loans is the loan amount limitations. 2. mortgage insurance. Although you do not pay private mortgage insurance with FHA loans, 3. Limited Options. These loans are only designed for those that plan on.

An uneducated real estate agent may give bad advice, or a seller. Currently lenders are still making FHA loans with a back end debt ratio of 55 percent.. I don't see FHA being a significant disadvantage, unless perhaps.

Seller hesitation: In some situations, an FHA loan can be a disadvantage when buying a home. Sellers like to know about potential buyers (real estate agents may share this information), and an FHA loan does not signal strength. What’s more, the seller may fear that extra requirements are going to slow down (and potentially threaten) the deal.

But there are situations where an FHA loan could actually be a disadvantage to the seller. This is especially true if a person is selling a house that has a lot of issues, such as peeling paint, damaged stairs, or other items in disrepair.

– While mortgage loans insured by the Federal housing administration offer advantages for buyers and sellers alike, there can be some disadvantages. Most times, though, accepting an offer from an FHA homebuyer isn’t any more risky to the seller than accepting an offer from someone applying for a conventional mortgage loan.

We’re looking for brokers and sellers who want the best for their borrowers from. Most recently, he was president and COO at loan origination and enterprise mortgage technology provider Mortgage.

interest rates for fha loans Launched in 1934 to help boost the housing market, the federal housing administration (fha) loan is still pretty much the same today. It’s a government-backed loan that allows people to buy a moderately priced home with a down payment as low as 3.5 percent. The partnership between the FHA and HUD.

When you choose to buy a home with an FHA mortgage loan or any. The seller is at a disadvantage in such cases because the borrower is.

Low Load Insurance fha conforming loans U.S. House votes to raise FHA loan limits – The measure would push the so-called FHA conforming loan limit in the highest-priced real estate markets back up to $729,750 through 2013, from $625,500, a sign of lawmaker concern over the.Down Payment Needed To Avoid Pmi fha loans pros and cons A 15-year or 30-year mortgage: What’s the better loan term as you round into your retirement years? – But among experts there is a debate on the pros and cons of. view of the mortgage-term debate. Refinancing to a longer-term mortgage, Part 1 Q: We got our original mortgage back in 2012 with a bad.How to Avoid PMI: Alternatives to Mortgage Insurance.. The easiest way to avoid PMI is by making a down payment of 20 percent or more. If you do this, you won’t have mortgage insurance on any loan. Another way to avoid PMI is to use a second mortgage. The first mortgage must be capped at 80.Instead of paying a mortgage insurance premium, we pay a higher interest rate.. The rate on the Tax Advantage loan is 8.375 percent compared to 7.5. way you can figure in your head whether the higher rate or PMI results in a lower cost.

Are there any risks to sellers to accept an FHA loan? Find answers to this and many other questions on Trulia Voices, a community for you to find and share local information. Get answers, and share your insights and experience.

Seller hesitation: In some situations, an FHA loan can be a disadvantage when buying a home. Sellers like to know about potential buyers (real estate agents may share this information), and an FHA loan does not signal strength. What’s more, the seller may fear that extra requirements are going to slow down (and potentially threaten) the deal.