What are the pros and cons of buying a house using an FHA loan?

A friend of mine believes I should try buying a house using a land contract that way I won't have to put?

• money down. What are the pros and cons to this? Is this possible?

• Answer:

  Land contracts are a really good way to build some equity on a house before you actually buy it. You pay your down payment along with your rent so you don't have to come up with any cash at closing or pay a high interest rate if your credit is not that good. Make you you invest the time and money in repairing your credit or just raising your credit score before you initial contract period is up. You can save yourself a lot of headaches if you do this. Look at it like this, you enter into the contract for the house and it's current value is, say, $150,000. The national average for property value increase is around 6%. In 2 years (the average length of a land contract) you have $18,450 in equity plus the amount you have built by paying towards that contract on a monthly basis. Make sure you review all the terms of the land contract or have a real estate attorney draw one up to make sure that your rights are protected.