Why you should avoid FHA when buying your first home

Here are the 4 reasons why I wouldn't use FHA financing if I was planning on buying my first home. And it's not that FHA is a bad option, it's just intended for people with lower credit scores. And there's a lot of benefits of using conventional financing, which I'm about to break down but first: My name is Nate, I'm a top 1% loan officer. I'm licensed in 14 states, and every day I help people with tips like this. So if this is helpful for you, please make sure you give my page a follow. The 1st reason I'd go with conventional financing over FHA is it allows you to put less money down. Yes, FHA allows you to put 3.5% down, but conventional is 3%. It's even lower. The second reason I would avoid FHA is that it has permanent mortgage insurance: PMI. With conventional financing, it eventually goes away once you reach 20% equity of the original value of your home. The third reason why I would avoid FHA if I could is that it has a huge upfront fee. It's 1.75% of the loan amount. So if you're doing a $400k loan, you're gonna pay an additional $7k to the bank just for doing the FHA program. And the fourth reason why I would avoid FHA is a lot of times it makes it harder for you to get your offer accepted because FHA appraisals are more strict about things like chipping paint and missing handrails, things that you could fix really easily as a homeowner. But look, if you have a lower credit score, FHA might be the better option for you. It's just that a lot of times loan officers will steer you towards FHA because it helps them more than it helps you. And if you want me to review your specific situation and help you decide which loan program makes the most sense, click the L.I.N.K in my bio to set up a FREE 15 minute call.