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The Pros and Cons of FHA Loans

A 30-second read by Nicholas Scheibner: The federal government has provided home buyers with a few mortgage-buying options to help purchase a home.  Below are some of the Pros and Cons for Federal Housing Administration (FHA) loans.

An important note:  FHA loans are for Primary Residences only.


  • Flexible qualification criteria-Minimum down payment is 3.5%. Keep in mind that the less money you put down on a mortgage, the higher the monthly payments will be.
  • Anyone can cosign, if needed, including a friend or parent. However, from a practical perspective, usually the co-signor is a family member.  If a friend co-signs for you, you need to put at least 25% down.  Note: If you are purchasing a multi-family house, even if a family member co-signs, you still need to put at least 25% down. 


  • Monthly Mortgage Insurance never goes away for low-down-payment mortgages. If the borrower puts at least 10% down, the mortgage insurance will remain for 11 years. If they put less than 10% down, it will remain for the life of the loan. 
  • An additional fee of 1.75% is required. This can also be paid at closing or rolled into the loan.

Baron Financial Group consults with independent mortgage professionals in order to explore options available to clients.  If you are thinking of purchasing a new home, refinancing a mortgage, or consolidating a HELOC (Home Equity Line of Credit), lean on us to help you through the process. Please contact your Baron Team if you have any questions.

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