E7's would provide a decent gain, but if cheap iron heads are what you're after, check into some gt40's or gt40p's. You can find them really cheap, and they would be a much better addition than the E7's. Keep in mind that if you get the gt40p's that you will need special headers to clear the plug wires due to the odd angle of the spark plugs.
The problem that you're going to run into is piston to valve clearance. The 86 Mustang 302 has flat top pistons and came stock with roughly 9.2 - 9.5:1 compression. I won't tell you that the E7s specifically will not work (since I've never tried them) but I'm reasonably sure you're going to need to fly cut the pistons to get them to fit. This is most surely going to be the case in the matter of the GT-40s because the valves I think are larger than even the E7s. Your best bet (if you don't want to fly cut the pistons) is to get a set of Twisted Wedge heads for under $1000. So long as you don't exceed the recommended lift, you shouldn't have any P to V problems.
The problem that you're going to run into is piston to valve clearance. The 86 Mustang 302 has flat top pistons and came stock with roughly 9.2 - 9.5:1 compression. I won't tell you that the E7s specifically will not work (since I've never tried them) but I'm reasonably sure you're going to need to fly cut the pistons to get them to fit. This is most surely going to be the case in the matter of the GT-40s because the valves I think are larger than even the E7s. Your best bet (if you don't want to fly cut the pistons) is to get a set of Twisted Wedge heads for under $1000. So long as you don't exceed the recommended lift, you shouldn't have any P to V problems.
E7's "should" fit without any problem as long as you are using a stock cam - it worked for me some years ago (it was close). According to Trick Flow (high ports at least) will not work w/o fly cutting - same goes for Gt-40 series heads.
The E7 swap is a 20 horse project - but you won'tl feel it till above 4500 where the e6 heads ran out of breath.
I've heard of people putting E7's on '86 flat top piston motors with no issues, but they had to be really conservative with the cam. I doubt with a stock cam the valves will be open much at all when the engine is at TDC, which is the only place where they could make contact.
Remember seeing this article a while back. Seems like it would be a pain to do, but if you notch the pistons, you could run whatever head/cam combo you desire.
Here's the link for hte twisted wedge incase you wanted more info on them. If you download the PDF file you can bump the cam you intend to run against the figures they provide for the 86 flat top pistons to make sure you don't have too much cam.