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Is there a difference between Conventional 30year fixed and FHA 30year fixed loans?
First time homebuyer here and I’m not sure what the difference is. We were thinking of an FHA loan but the mortgage company asked us to think about a conventional 30 year fixed too. What’s the difference? Sounds the same to me.
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#2 written by onlinejobsforall.com 1 year ago
i dont think there will be not much diff. you can found details at http://realestatepropertynews.com/diff-between-Conventional-30-and-FHA-30-years-FL.html
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#4 written by Mortgageman 1 year ago
The difference is the mortgage insurance (PMI). With a conventional loan, you pay it monthly and you can petition to have it taken off after two years and 22% equity. With FHA, you pay 1.5% upfront (added to your loan amount) with a reduced monthly amount. The FHA loan will always have Mortgage Insurance. FHA is great for people who don’t have 5% down and have less than perfect credit. Otherwise, Conventional is the way to go.
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#5 written by Beatrice C 1 year ago
An FHA loan is a government backed loan. They are usually easier to qualify for and they require a less of a down payment. The government guarantees this loan to the mortgage company. If you default the government pays off the mortgage company and takes over the home ( a HUD home) On an FHA loan the lender will be more willing to work with you if you fall behind. They do not want too many defaulted FHA loans on file. They will offer counseling, a payment plan etc… before they finally foreclose on the home. If you can go FHA
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First of all the guy who said you will always have mortgage insurance(PMI) on an FHA is wrong. You will have it for a minimum of 5 years. But you still have to petition to have it removed then. The PMI will be a lot lower than with a conventional loan. But, as of Jan of this year the PMI is now 100% tax deductible as long as your household makes less than 100k per year. The rate you will get on a FHA will be better than the conventional 100% LTV loan. A lot of loan officers will try to get you to do a Conventional loan instead because they dont know a lot about FHA loans.
One thing you should know is that FHA allows 6% seller concessions. This means that the seller is allowed to pay all your closing costs and pre-pays. A Conventional Conforming loan only allows 3%. This means that even though you get a 100% loan you would still probably have to bring money to closing. Go with the FHA