Friday, March 20, 2009

FHA Loans Become Popular Choice

FHA Loans Become Popular Choice Newly discovered FHA loans, which require low down payments but charge higher interest to borrowers with lower credit ratings, have quickly become a wildly popular choice for home buyers.

The loans require a down payment of only 3.5 percent, while conventional loans require down payments of 10 percent or higher.However, the products also are drawing some unfavorable comparisons to now-abolished subprime loans.

Finance professionals, however, stress that unlike the infamous subprime mortgages of years past, FHA lenders go out of their way to verify income and ensure that they are not approving "liar loans."

Source: Palm Beach Post (Fla.), Jeff Ostrowski (03/16/09)

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