6 Reasons to Turn Your Nose Up at FHA Loans

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FHA loans are great for many home buyers. First time home buyers, retiring couples looking to simplify or families looking to grow can all take advantage of an FHA home mortgage loan. But FHA loans aren't for everyone. Not every home buyer will want one, and not everyone buying a home will qualify for an FHA loan.

Don't consider FHA loans if:

1. You'd rather pay 20% down on your house. FHA loans require a 3.5% down payment. If you have money burning a hole in your pocket and want to put it on the table as a down payment, more power to you. You might consider keeping that cash to buy new furniture...just sayin'.
2. The home you want is perfect as it is. The FHA 203k would not be for you, since it helps pay for home improvements. Instead, use another mortgage program and finance your dream home as it sits.
3. Your credit score is lower than the low 600's range. Credit scores and FHA loans may vary from lender to lender, but you definitely need yours above the low 600-range.
4. You love renting and you'll never buy a house. Well, we can't argue with this logic. If you love paying someone else's mortgage, then go for it. And feel free to send some of that extra cash to us. We can spend it on a pizza party.
5. The lottery ticket "savings plan" paid off and you don't need to finance a home. Oh wait, that's not a realistic plan. Also, whatever you pay for with cash will have costs to go along with it like taxes, insurance and maintenance. So be carfeul with how much you spend on that mansion.
6. Living with mom and dad works just fine, thank you very much.

If these reasons top your list for avoinding FHA loans, then we wish you luck. If not, let's talk about the home buying and mortgage loan process. The first step in your house hunting should be mortgage pre-approval. This lets you know how much house you can afford, and lets a real estate agent know thsat you're a serious buyer.

Getting your credit mortgage-ready is also important. Many loan programs have minimum credit scores (like 620 as an example). Paying your bills on time is one way to get mortgage-ready. Download the free guide at the button below, "The Road to Mortgage-Ready Credit." It will walk you through what makes up a credit score, how to bring your credit score up and more.

(nose photo: Flickr user OakleyOriginals)