What is the difference between an FHA Loan and a Conventional Loan? Is a Conventional loan always the better home loan?
What I have found to be true every situation is different for every borrower. One particular loan program might be perfect for your situation but for another it would not. As a Loan Officer it is my job to discuss all different types of loan options, the pros and cons, and work towards the best for you. In saying that let me discuss some of the common pros and cons of FHA and Conventional loans. FHA Loans. Some of the initial disadvantages to a FHA loan are such as Upfront Mortgage Insurance that is financed inside your mortgage loan and also a monthly Private Mortgage Insurance (PMI). Interest rates will stay mostly the same between a FHA Loan and a Conventional Conforming loan. Advantages to a FHA loan is a minimum contribution of 3%, which can be gifted. Closing costs and pre-paids can be negotiated by the Seller to pay. FHA loans are not as stringent to qualify with your credit. There is no Fico score requirement to qualify. FHA underwriting guidelines are more liberal on your debt
