Should I finance through a home builder or FHA?

Question

Will a builder offer more money, the same, or less when compared to FHA. I understand there are alot of variables here, Im just looking for a general rule of thumb. THANKS!

Answer 1

FHA - The builder is not a bank, but he can sell your loan to anyone.  

FHA is better.

Answer 2

Builders may have a company they prefer to have you use.  Is that in your best interest?  Probably not but you can't know for sure without shopping.

You should also shop at least three places.  Banks and credit unions get my vote but that's just my preference.  Ask for a disclosure statement from each source.  Then compare them line-by-line.  Watch out for "junk fees."  Those are negotiable.  

FHA can be good but so can conventional mortgages.  Just stay away from the fancy stuff (interest only, variable rate, etc.)  You want a fixed rate mortgage.  Most buyers go for 30 years and that is fine.  You can always pay extra principal along the way.  Don't get into anything with a prepayment penalty.

Good luck!  (And good research really takes luck out of the equation.)