Friday, July 22, 2011

FHA vs Conventional Loans

The lending industry is continually changing, I thought it would be helpful to give a snapshot of FHA & Conventional loans and their requirements. Thanks to Eric Schroeder, my lender friend at Primelending for putting this together for me.

3.5% down with monthly mortgage insurance, typically a good way to go being a first time homebuyer. Has an excellent and typically easier to close when compared to a conventional loan that is needing mortgage insurance. FHA will allow properties with agriculture exemption and acreage. The 3.5% and closing cost can be in the form of a gift and the seller can pay up to 6% in closing cost. The mortgage lender can also help pay for some of the closing cost, this is called premium pricing. Minimal credit score of 600 with additional underwriting requirements, otherwise, a 640 is required.

5% down with monthly mortgage insurance, conventional will allow a monthly payment without mortgage insurance as long as the borrower puts down 20%. The seller will have to come up with the down payment out of their own funds and the seller can pay up to 3% in closing cost assistance. A minimal score of 620 is required on a conventional loan.

If you have additional questions or want to see about getting pre-qualified for a loan feel free to give Eric a call at 817-596-7878 or visit Primelending's website by clicking

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