FHA may be the best financing option of 2009.
Why is the FHA program so good?
- You can get a fixed-rate loan at a decent rate. This is very important because unprecedented government spending and balance-of-payments deficits could cause inflation and the devaluation of the dollar — bad news for those with adjustable-rate loans. If inflation becomes an issue loan rates and monthly payments will soar for ARM borrowers.
- No prepayment penalty or other funny business.
- HUD, to its credit, tries to help FHA borrowers who run into hard times.
- Application process is very clear: You have to provide paperwork and verifications, the way loans should always be underwritten.
- Buy with 3.5 percent down.