Toby Lynn
Loan Goddess
404-255-9025
Email: Toby@MortgageLoanGoddess.com
In my years in the mortgage business, FHA vs. Conventional advantages and disadvantages have changed.
Currently, FHA is a major player in the mortgage world. This is due to a greater lienency in credit scores and also credit circumstances (Bankruptcy or Short Sale history for example). Gifts are allowed for down payments, the ability for a family member to co-sign the loan and a lower (3.5%) verall required down payment than Conventional help contribute to FHA's current popularity.Conventional financing, on the other hand, relies heavily upon credit scoring. If your score is below the minimum standard for the particular loan program you are applying for, you will not qualify, and there are currently no exceptions.
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The Mortgage Insurance is quite different between the two loans, and this is where the advantages and disadvantages come into condsideration.
On a FHA mortgage, the way they fund their program is to charge the borrower an "upfront" fee, that gets added into your mortgage loan. In addition, you pay a monthly amount.
On a Conventional mortgage, you only pay mortgage insurance if the loan is above 80% of either the value or purchase price. The "rate" for your mortgage insurance premium is based on a menu of credit score, loan-to-value and type of property.
Bottom line is; all things being equal and if a borrower has their choice of what type of mortgage they will qualify for, the answer is; it still depends. And THIS is why you want to work with a Loan Goddess; to help you understand the choices.
Currently, FHA is a major player in the mortgage world. This is due to a greater lienency in credit scores and also credit circumstances (Bankruptcy or Short Sale history for example). Gifts are allowed for down payments, the ability for a family member to co-sign the loan and a lower (3.5%) verall required down payment than Conventional help contribute to FHA's current popularity.Conventional financing, on the other hand, relies heavily upon credit scoring. If your score is below the minimum standard for the particular loan program you are applying for, you will not qualify, and there are currently no exceptions.
_________
The Mortgage Insurance is quite different between the two loans, and this is where the advantages and disadvantages come into condsideration.
On a FHA mortgage, the way they fund their program is to charge the borrower an "upfront" fee, that gets added into your mortgage loan. In addition, you pay a monthly amount.
On a Conventional mortgage, you only pay mortgage insurance if the loan is above 80% of either the value or purchase price. The "rate" for your mortgage insurance premium is based on a menu of credit score, loan-to-value and type of property.
Bottom line is; all things being equal and if a borrower has their choice of what type of mortgage they will qualify for, the answer is; it still depends. And THIS is why you want to work with a Loan Goddess; to help you understand the choices.
FHA vs. Conventional