What is the major difference between FHA and Conventional Loan?
Why most people take convetional loan rather than FHA?
which one is better? Safer? what is the difference?
Tags: between, conventional, difference, Loan, major
Read more about the FHA Loan here.
Why most people take convetional loan rather than FHA?
which one is better? Safer? what is the difference?
2011/07/27 at 22:28:10
FHA loans typically lend at a lower limit than a conventional loan, but also provide the option of purchasing with less equity, lower downpayments, lower PMI rates, and better rates for people with imperfect credit. A conventional loan is really only better for people borrowing substantial purchase amounts but have perfect credit and can qualify for PMI avoidance type loans such as an 80/10/10 or an 85/15. Be careful of these loans though, as the secondary mortgages are often set up as interest only loans to lower the payment deceptively, leaving you with a large amount to payoff or reifnance at the end of your mortgage.
2011/07/27 at 21:53:07
You don’t want to do an FHA loan if you can qualify for a Conventional loan, because the rates are better on Conventional loans, and you can do an 80/10/10 to avoid PMI altogether.
Some sellers also, will not entertain a buyer who has FHA financing, which is perfectly legal.
2011/07/27 at 21:22:14
Read here: http://www.fhainfo.com/fhavsconventional.htm