Common Myths About FHA Loans Myth: Takes more time processing Truth: Takes no more time than a conventional mortgage loan. Adds no additional or special requirements. Uses TOTAL Scorecard/AUS approval allowing you to complete a mortgage loan in the amount of time it takes to get the appraisal.
Myth: More paperwork is involved.
Truth: Requires only one additional document signed by the borrower.
Myth: Higher costs are inevitable.
Truth:
Rates are competitive with the best in the industry. Lender insurance programs eliminate shipping and reshipping costs. Streamlined mortgage loan process.
Myth: The borrower can't pay certain mortgage loan costs or fees.
Truth:
FHA eliminated non-allowable closing cost fee schedule (ML 06-04, 06-07) . The borrower, or any interested party to the mortgage loan, may pay all reasonable and customary charges.
Myth: FHA is too restrictive.
Truth:
FHA provides guidelines for underwriting; same as industry investors. FHA allows for manual underwriting for all mortgage loan programs; some in the industry will not approve a mortgage loan without an automated approval. Automated Underwriting Systems approval is not required - allows for hands-on, common sense judgments.
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