10/3/2009 11:19 PM
We introduced FHA loan to Box Home Loans in the fall of 2009, and have been pleased (and a little surprised) at how quickly that segment of our business has grown. We attribute that to the following reasons:
First, FHA loans are incredibly well-priced today. Essentially, if you're putting down less than 10%, FHA is still a more affordable way to finance. Also, the FHA 15 year fixed loan at 90% LTV or less contains no monthly mortgage, which makes it an affordable option for people who find themselves between 80 and 90% LTV.
Second, FHA has always been an important part of the purchase market, as it allows borrowers to finance homes with as little as 3.5% down payment. Our FHA volume has heated up as the purchase market continues to grow.
Third, our parent company, Republic Mortgage, is a powerful government lender, whose origination volumes consist of about 70% FHA business. That kind of volume affords them (and us) the best possible FHA pricing on the market. When you combine Republic's buying power with Box's extremely efficient model, the product is a far superior FHA price.