FHA Home Loans Refinancing

Pros and Cons of FHA Home Loans for First Time Buyers


FHA home financing comes with many pros, making it an often suitable choice for prospective first time house buying. For those with low or no credit, obtaining a home loan can often prove to be a very difficult endeavor, as lenders have become considerably more conservative with approving home loans. FHA mortgages provide an option that allows a person to have low or no credit and still become a home owner, even approving those with past credit blemishes such as foreclosures or filing for chapter 7 or 13 bankruptcy. Also, the low down payment is another attractive aspect of an FHA house loan, as it does not require a home buyer to have the very high down payment percentage that other mortgage options will ask for. Depending on a person’s credit score and history, a person can get a home loan that requires a down payment of as little as 3.5%.

Get Started with Quotes from Lenders for First Time Home Loans

While FHA loans for first time home buying may have many pros, they also come with some cons:

  • Mortgage insurance is required
  • Compare closing costs between Fannie Mae, Freddie Mac and FHA
  • US government has been insuring loans for 1st time home buyers since 1934

Other Popular Pages for First Time House Buyers:

When to Apply for a FHA Loan

For those with exceptional credit scores, or who can afford the higher down payment rates, a FHA first time home loan may not be the best option. One stipulation that comes along with FHA home loans is the requirement for mortgage insurance, and this includes paying monthly mortgage insurance rates and premiums. This insurance allows FHA loans to be granted to those with lower or no credit, but these payments may be inconvenient for those who can obtain a home loan that does not require the insurance. Also, closing costs with FHA loans may be somewhat higher than those incurred with non-FHA home loans, but this is not exclusively the case.



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