FHA construction loans are special home loans backed by the government. Many people like them because they offer easy approvals and low down payments. However, while they have strong points, it’s key to know their downsides too. This ensures you make a smart choice for your future.
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Higher Mortgage Insurance Premiums:
Mortgage Insurance Premium (MIP) is a fee you pay with some loans. It protects lenders if a borrower defaults. FHA construction loans often have higher MIP rates than other loans. Over the years, this higher rate can mean you pay more than you might with a different loan.