What are some of the major differences between FHA(Federal Housing Administration) loans and Conventional loans?
With an FHA loan you need to bring in 3.5% as a downpayment. For a conventional loan, you must bring in a 5% downpayment.
With a conventional loan, if you bring in a 20% downpayment, you will not have to pay PMI(private mortgage insurance). With a FHA loan, you will always have to pay MIP(mortgage insurance premium) as well as PMI.
FHA has different standards with appraisals, but don't let this scare you. They are a little more strict on safety issues (which you probably want anyway).
With a conventional loan, you will need a higher credit score than for a FHA loan. FHA will approve you if you have a 620 credit score (I recommend that you take care of your credit, but if you have had a few missed payments, FHA is more willing to look it over than conventional.)
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