
Yesterday I described How to game the system with FHA loans for maximum advantage. Today, I want to look at the cost of that financing. It's up to you to determine whether you believe the benefits are worth the costs. Many have quipped that FHA has become the replacement for subprime. They have very low standards for qualification (a 580 FICO score), a very low down payment requirement (currently 3.5%), and as a result, they have become the loan-of-necessity for anyone who doesn't have the credit requirements or the down payment necessary to obtain other financing. In other words, they have stepped into the void left by the collapse of subprime lending. The FHA insurance premium is a direct measure of…[READ MORE]