FHA mortgage are helping millions buy a home and refinance at a low fixed rate! - click to contact a specialist

Conventional or FHA?

Both FHA and Conventional loans offer the opportunity to refinance or buy a home at a low fixed rate but Conventional and FHA loans have a few major differences that are important to understand when deciding to apply for a mortgage - click to speak with a specialist

Benefits of an FHA Loan

  • You don't need perfect credit to qualify for FHA's low fixed rates
  • FHA interest rates are just as low, if not lower, than conventional loans
  • With an FHA loan you can buy a home with only 3.5% down
  • You can refinance your home up to 97.75% of the appraised value
  • You can cash out equity up to 85% of your homes value with a minimum 580 FICO score
  • FHA loans allow a co-borrower on the loan that does not live in the property
  • FHA loans are generally easier to qualify for than Conventional loans
  • FHA loans are insured by the Government

FHA Loan Drawbacks

  • FHA closing costs may be higher than conventional loans
  • FHA loans may take longer to close than a conventional loan
  • You ar required to pay mortgage insurance on all FHA loans where as conventional loans only require this extra monthly payment if your loan to value ratio exceeds a certain amount
  • FHA lenders will not loan on investment properties
clcik to speak with a FHA specialist

Conventional Loan Benefits

  • Conventional loans have lower closing costs than FHA loans
  • If your credit is excellent, you may qualify for a very low rate
  • Conventional lenders will loan on investment properties
  • Conventional loans generally take less time to close
  • The seller of a home may be more attracted to a buyer who is pre-qualified for a conventional loan
  • Conventional lenders may offer a no income check loan, FHA will not

Conventional Loan Drawbacks

  • Imperfections in credit may result in a higher rate or disqualification of your application
  • A larger down payment is usually required when buying a home
  • Refinancing to a low fixed rate usually requires excellent credit with a conventional loan where as FHA loans can give you a low fixed rate regardless of credit score or credit blemishes

Factors like your credit score, equity in the home (or amount of down payment if you are buying a home), property type and other factors can play a major role in choosing a conventional or FHA mortgage. Click here to have our mortgage specialist help you determine whether a Conventional or FHA loan is right for you.

FHA Qualifying

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