Contact us for more information about our services today. I had to do a short sale on a rental property in 1/2012 due to the renter totally destroying the property making it impossible to fix up and rent again or to sell for the value. Another benefit of going with a conventional loan vs. an FHA loan is the higher loan limit, which can be as high as $765,600 in certain parts of the nation. Along with that, an eligible donor can provide gift funds for 100% of the borrower’s closing costs and down payment. My 1st is $151,000 at 4.625 (Conventional loan) and my 2nd (home Equity loan) is $56,000 at 6%. Do you know if this program is only for first-time homeowners? For example, the FHA has minimum property standards, and if the property doesn't meet them, the seller or the buyer may need to pay for repairs before it can qualify for a mortgage. However, there are still situations where a minimum contribution is necessary, for example, if it’s a multi-unit property. We would like to try conventional. An FHA cash-out refinancing mortgage may offer lower interest rates than traditional home equity financing loans; you may qualify for one of two FHA mortgage plans which offer cash-out plans. The upside is that the 3.25% rate is likely much better than the rate you’d probably receive for a conventional loan. The APR is usually higher than your interest rate because it factors in certain closing costs to give you a more complete picture of what your total borrowing costs are. For FHA loans, down payment of 3.5 percent is required for maximum financing. An FHA cash-out refinancing mortgage may offer lower interest rates than traditional home equity financing loans; you may qualify for one of two FHA mortgage plans which offer cash-out plans. Do FHA appraisers know the selling price. 3.5% down, owner occupants only. Sorry about my typo and thank you for the response! However, we just failed the FHA appraisal due to septic distance from well (needs to be 50 feet, we are at 45 ft) . FHA Loans vs. I heard FHA has a maximum financing of unto 625,500. I never inquired about getting my PMI removed after five years being that I didn’t know I was able to do that until recently. That pretty much ends the discussion if you’re planning to buy even semi-expensive real estate there. Now let’s discuss conventional loans, an alternative to FHA loans that tend to offer a lot more variety. So for those who can’t put 20% down on a conventional loan, it seems that there’s zero advantage to getting a conventional loan since you have to pay PMI either way. Conventional ($200k loan @ 4% with 10% down) for borrower with 720 FICO Score. I appreciate you breaking down these differences in summary. FHA vs. conventional loan: If you need a mortgage to buy a house, odds are you'll be weighing the pros and cons of the two most common types available. These days, both FHA and conventional loans could make sense depending on your unique loan scenario. And more importantly, they aren’t capped at a certain loan limit because they live outside the requirements of Fannie Mae and Freddie Mac. With the market the way it is and a lot of uncertainty in houses and as well as everyone thinking about the next bubble, finding books on this topic during this time frame is not an easy task. Does the seller have to pick up more costs at closing with a FHA loan? It’s easy to understand why homebuyers like FHA loans: They require lower down payments than do most conventional – those not insured by the federal government — mortgage loans. While FHA loans have come a long way and pose very few problems for sellers, many still hold back. Would I be better off with the FHA or should I seek a conventional loan? If a seller receives equal offers from buyers with conventional mortgages, he or she might choose those over an FHA borrower. Are there requirements for this for FHA and/or conventional loans? Do the math and that might help you weigh the pros and cons of taking the FHA loan now or waiting another year. Borrowers who cannot qualify for a conventional loan have no choice, they must use an FHA, which means that step 1 is to determine whether or not you qualify for both. Conventional Loans Offer Many More Options and Just 3% Down! What’s the appeal of the FHA mortgage loan? Want to receive the latest real estate and mortgage news direct to your inbox? My goal was to go conventional so I could cut the PMI and pay my own escrow. One offers loan amounts for up to 95% of the appraised value of the home, another FHA refinancing loan offers amounts up to 85% of the appraised value. But borrowers can use multiple FHA loans for purchasing or refinancing a home loan. In fact, some borrowers may have excellent credit and still go the FHA route because it makes more financial sense. is not an option since we are purchasing an unoccupied short sale. Some FHA loans go quickly, while others take longer. I’m going in with less than 20% down (5% max) on a condo that costs 350k. Yes, nearly 83% of those who used an FHA loan for a home purchase were first-timers. The main selling point of an FHA loan is the 3.5% minimum down payment requirement coupled with a low credit score requirement. Granted, the FHA appraisal is a bit tougher, but credit requirements on an FHA loan are lighter. Copyright © 2006-2021 - The Truth About Mortgage.com, Powered by the lovely Wordpress platform. A refinance is just a type of mortgage. You can ask your loan servicer when this projected date will occur. Why Not to Go With an FHA Loan. We can see that FHA financing is remarkably cheaper for borrowers with credit scores between 620-679, and marginally cheaper for scores between 680-719. Thanks for your information! I am selling my house and will be buying another one. After reading your Blog and all the Q&A, I can tell I have a LOT to learn. Sellers may assume the deal is … What the loan rules DO say is that FHA financing is not permitted for homes that have been owned for a very short amount of time (up to 90 days) and returned to the market. Also, it’s possible for someone to get an 80% first mortgage via the conventional route and a second mortgage while avoiding PMI entirely. Do you think she’s being straightforward? Ask the lender to break down ALL the costs and do a side-by-side comparison to determine the differences. FHA loans have strict property guidelines, so sellers worry that they may have to make repairs to the home before closing on the property. There may be situations where an FHA purchase offer works against you. So it really depends on the bank in question. Conventional mortgages generally present fewer hurdles in terms of processing and inspections. What does Name of person acknowledging mean? As noted, FHA home loans have become insanely popular. This can be a major benefit to a buyer when interest rates are higher than what the seller is paying and as long as the seller doesn’t have much equity in the house, James Hines, a financial adviser at Wells Fargo, told Bankrate. The first is that conventional loans tend to indicate (fairly or not) that buyers have access to more funds, since they’re able to make larger down payments. Why do people prefer FHA loans? Since the FHA insures these loans, that means if borrowers default on the loan, the government will pay the lender for any losses. Cash sales made up 22% of sales in December 2018, which is up from 20% the year prior, according to data from the National Association of Realtors. Hi Colin, thank you very much for your help, awfully kind of you! They do not want to accept a mediocre offer and leave others on the table. So make sure your FHA seller too is aware of how the FHA will calculate their payoff on their home and recommend an end of month closing, so they can put as much money in their pocket when they sell their home. FHA has an “identity of interest” cert that lowers the max LTV to 85% if the purchaser and seller are related. So the home buyer usually pays for it. Both FHA and conventional loans can be had for very little down! Don’t they all look on the market and pull the best loan based on your credit score? Hi Colin first thanks for all the helpful information. Sure, you can always refinance out of the FHA, assuming you qualify for a conventional loan when that time comes. Why do sellers prefer conventional loans over FHA? Again, this is subject to lenders actually offering programs for scores this low. I also pay 800 a month in student loans. The condos are not FHA approved. But do the math either way. I’m interested in buy a house to live in (not rent out). We’ve talked about some benefits of FHA loans, but there are drawbacks as well. The process is remarkably similar to a traditional refinance, although there are some additional considerations. I was told that my rate on an FHA loan would be about 0.25% cheaper than a conventional loan, but with mortgage insurance premiums factored in the costs eclipse the interest rate savings. However I saw a disclaimer that states seller closing help on a conventional is capped at 3% – is that a Federally set limit? Qualification will be based on your job, income, assets, amount of equity in home to determine LTV, credit score, and so on. ... Take a look at how FHA and conventional loans might compare when you consider down payment, interest rate, and monthly payments. So there are some complexities involved but for some, like you alluded to, FHA may be the way to go. His asking price is a lot less then what it’s valued at. This is why FHA homeowners who do a FHA refinance will always be advised to close at the end of the month, so they don’t get charged double interest. The same can be said for conventional. Hi Colin, My husband and I just passed the four year mark from a former foreclosure. In any case, shop around with a broker and local banks/lenders to see who can do what. Which would be a better choice in my case FHA or conventional? They do not want to accept a mediocre offer and leave others on the table. But the appraiser has some other research to do as well, such as reviewing comparable sales. If you can get a conventional loan you’ll be able to forego PMI and potentially save a good amount monthly. They also generally have lower closing costs than conventional loans. But why do sellers often reject offers with VA-backed financing? Why a buyer would choose an FHA loan over a conventional loan: There are several reasons a buyer would choose an FHA loan over a conventional loan. The FHA has increased mortgage insurance premiums several times now to shore up its capital reserves after making a bunch of high-risk, bad loans in the past. What do you suggest? Conventional loans do not require UFMIP, even where private mortgage insurance (PMI) is required. Most FHA loans also require borrowers to purchase mortgage insurance. I don’t have a set time frame to buy one I”m just now starting to look at what I need to learn. I had a foreclosure process started on my home back in 2010 but it eventually got modified and the payments have been current since then but the lender is saying that because the foreclosure was started and because of the modification we have to wait 7years for conventional. For one, if the home is appraised for less than the agreed-upon price, the seller must reduce the selling price to match the appraised price, or the deal will fall through. Should I wait until 1/2016 and do a conventional or take the offer of the FHA at 3.25? At the start if this comment thread in 2013 the MIP was really high on FHA loans, but are much lower now in December 2020? And now you can get a conventional loan with just 3% down, which actually beats the FHA’s down payment requirement slightly! It’s a question many ask, especially when comparing loan options to conventional, VA, or other non-FHA mortgages. But why do sellers often reject offers with VA-backed financing? I have always gone with friends but don’t know if I am getting the best rates. Thanks for your assistance! But that really isn’t the case anymore. Can I Lower My Mortgage Rate Without Refinancing? There is also the FHA 203k loan program, which allows you to make home improvements and get long-term financing in one loan. Buyers love FHA because:-The new "subprime": The FHA loan makes more sense for home buyers with credit scores between 620 and 660 than a conventional loan. These seller concessions are capped by Fannie, Freddie, the FHA, and so on. I had a short sale in Jan 2013 and am now renting…I am looking to buy a condo in a 55+ community that is only $40,000. I’m in the process of purchasing a home. The FHA must approve the refinance, even though you are moving to a non-FHA-insured lender. In recent years, FHA loans surged in popularity, largely because subprime (and Alt-A) lending was all but extinguished as a result of the ongoing mortgage crisis. Would we have PMI for the life of the loan? Who picks up what costs can be negotiated regardless of the financing route the buyer takes, though the limits might be different. Shop around and you’ll see the difference in … You need to determine when the monthly savings outweigh the upfront costs…so if you stay in the loan long enough to cover the upfront costs, you’ll begin saving money each month. No Mortgage Insurance Requirement on Conventional Loans. If so, how does the MIP and PMI of a FHA loan compare to just the PMI of a conventional loan if you have a 750 credit score? Would it be better for me to do convention loan or a FHA loan? But it has more to do with the individual borrower (and the number of underwriting issues they encounter) than the type of loan being … be very careful though , brokers prefer you to go conventional because they make more money on them . Simply put, the FHA stepped in to fill the void after private lenders closed up shop. So essentially today’s FHA borrower is paying for the offenses of the past. An FHA home loan is a mortgage that has been insured by the Federal Housing Administration. Borrowers with credit scores as low as 500 can qualify for an FHA loan. So if you’ve got 20% to put down, a conventional loan should be the better deal because you won’t have to pay PMI every month (or upfront), even if the interest rate is slightly higher on the conventional loan. Hello i want to refinance my house because my interest rated is at 6.5 percent the only loan i qualify is the FHA loan . You still have to pay mortgage insurance on an FHA loan even if your LTV is 80% or less. Also if your mortgage insurance is lender-paid, that could explain a higher conventional rate as well because it’s built into the rate. How to get a mortgage with a low credit score, 10 Ways to Save Money on Your Next Mortgage, How to Reduce Closing Costs on Your Mortgage. Since we can’t put down 20%, we would have to pay PMI on a conventional loan. Keep in mind that FHA loan offerings are also pretty basic. After condo and house hunting, we realized condos were best but none are FHA approved. The appraiser can tell you what a buyer should pay. Home sellers really don't know the difference between the two loans. While FHA mortgages require a slightly higher minimum down payment, you only need a 580 FICO score for approval. I’m buying a home in Texas for 240,000. After a little research they gave us the news that we could get a mortgage, but it would have to be an FHA. Can you tell me the best way to look for a conventional loan. Do sellers have to pay closing costs on FHA loans? Where can I find out more information about my situation. My credit score is 649. Loan officers are confusing me because each seems to want to push me in varying directions and I don’t feel like I can get a straight answer. Contact us for more information about our services today. Appraisal Contingency: All loans require an appraisal, and the lender will only lend up to the amount that the home appraises for. It really depends on the actual numbers and what you plan to do with the loan/property long term. We are first time home buyers and are only looking at condos around 110-130k and we both have credit scores above 780. Why do sellers prefer conventional over FHA? How to Get a Mortgage: From Start to Finish, 21 Things That Can Raise Your Mortgage Rate. Please advice us thank you, Colin. Sellers Want Top Dollar for Their Home. Why do sellers prefer conventional over FHA? My FICO scores are 775, 765, and 761. Shouldn't be a big deal unless you've been deferring maintenance. (score aprox 670). The waiting period for conventional loans is generally seven years (3 years with extenuating circumstances), though there’s no absolute guarantee you’ll qualify for a mortgage unless everything else adds up, such as income, job, assets, credit score, and so forth. I’ve been approved for a conventional but hearing the amount I may have to bring to closing is extremely high for me. A conventional loan, for instance, could be used to buy a primary residence, vacation home, or rental property. however as time passed my lender began to explain to me that the conventional loan would be a better option for me, because I was trying to get out of paying the monthly pmi. Additionally, there are select lender programs that offer 3% down with no MI, so in some cases you can put down even less than an FHA loan without being subject to that pesky mortgage insurance. Yes, all FHA loans have mortgage insurance requirements now. That is my only debt payment. Sellers sometimes see complications in that and will lean toward a conventional buyer. This is sometimes the case in multiple-offer scenarios. It’s great that you picked up on that. Why would that be and should I choose the FHA instead? But borrowers can use multiple FHA loans for purchasing or refinancing a home loan. You could look into a FHA 203k loan that includes money for expected renovations. We will line them up with a conventional loan so you can see how they compare. © AskingLot.com LTD 2021 All Rights Reserved. In other words, you’ll most likely be stuck with a 30-year or 15-year fixed, or a 5/1 adjustable-rate mortgage. That might be the pitfall…though there are plenty of good FHA borrowers out there too. Mortgage Insurance: FHA vs. While conventional loans typically require a higher credit score than an FHA loan, if your credit score is high, you can still secure a conventional loan with a 3% down payment. Since your short sale was only two years ago, it doesn’t sound like you’d qualify for FHA unless you could prove extenuating circumstances. Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. So it doesn’t really need to stay in-force for life. Of course, you can argue that the PMI is built into the rate when putting down less than 20%, even if it isn’t paid explicitly. What are the names of Santa's 12 reindeers? Waiting for the 3% conv. There are a few factors at play here. They feel that buyers who can secure any other financing option are ‘stronger buyers.’ FHA buyers have a reputation for having low credit scores, little money to put down, and less than optimal qualifying requirements. However, it may not be an issue for you because your DTI ratio is already so low. In other words, you don’t need much if any cash to finance your home purchase with an FHA mortgage. can i go from my FHA loan to conventional loan? Might want to work on your credit as well to broaden your options. Q. What is the definition of movement in science? Why do people prefer FHA loans? They may want to make sure their home is maintained and cared for far into the future. FHA financing is not trusted because real estate agents do not understand how they work. You might want to try another loan officer/broker/bank to see what alternatives you have. The conventional route requires better credit (620+) in most cases but you can avoid mortgage insurance. The screenshot above from the Urban Institute details when FHA wins out over conventional lending, and it tends to happen if credit scores fall below 720. Hello Colin: Thanks for taking time to respond to questions. Sellers Want Top Dollar for Their Home. And the minimum down payment requirement is lower! As such, a seller whose short-sale home is in disrepair or needs more than minor cosmetic work may prefer a conventional offer because it is less likely to result in a request for repairs. I may want to go FHA so I won’t have to pay all that money upfront ($53,000). The loan officer is only offering an FHA loan, but seems crazy to be stuck with mortgage insurance for the life of the loan when their incomes would allow them to pay off the 20% principle within the first year or two of the loan. A conventional loan, for instance, could be used to buy a primary residence, vacation home, or rental property. stumbled upon this website after searching the pros and cons between fha loan and conventional loan and this article helps a lot in understanding it. Although, I am still confused with the PMI for FHA loans. But again, have him/her sit down and really go through the numbers to weigh the pros and cons. The upfront mortgage insurance requirement is unavoidable, and nearly doubled from 1% to 1.75% back in 2012. Is this crazy high? Tip: If you want a zero down loan, aka have nothing in your savings account, consider VA loans or USDA home loans instead, both of which don’t require a down payment. Lastly, you know your own neighborhood best. Reasons Sellers Don’t Like FHA Loans. A lot of sellers prefer conventional loans because if the roofs OK n there no termites they will make the loan . If it were closer to the maximum allowed, the collection would potentially be more of a roadblock because it generally needs to be factored into your monthly obligations. Hi Colin. Another edition of mortgage match-ups: “FHA vs. conventional loan.”. Borrowers who use FHA loans to purchase a home have to pay two different mortgage insurance premiums (MIPs). So i would want to know can i get any conventional loan with 7% down payment for purchase price 670k….i was told minimum is 10% down for conventional loan for loan value above 430k. In any case your actual rate of 3.75% is what monthly payments should be based on. Thanks for the side-by-side comparison. I only do a few each year, mostly off-market, because it's so hard to get offers accepted if it's an MLS property. FHA loans attract buyers who might not have the cash savings for the closing costs out of pocket. All of these factors make FHA loans an ideal choice for first-time homebuyers. He has been writing passionately about mortgages for nearly 15 years. Appraised value is $350k, have $245k left on prior mortgage, have a credit score of 780. Your only option will be a conventional mortgage loan. I wouldn’t say there’s one single resource that has all the answers…just visiting blogs like mine over time will help you better understand the real estate world. At least they recently slashed the upfront one. Underwriting is one of the biggest variables. That alone is huge and something many individuals don’t bother to do. 2nd question. Jone Hollow Realty Group is a premier full service real estate boutique and local expert. FHA loans also have stricter guidelines for the seller your buying the house from . I also reached out to my loan officer as suggested here. Why? The only thing is that i dont want to pay the extra insurance for 30 yrs i dont know if its a good plan to go with the FHA loan…. The Federal Housing Administration's loans have become a valuable source of financing, especially for people experiencing tough economic times. In most cases, the appraisal can be completed within a matter of days. Approved and everything. Why should first-time home buyers consider this option? Another negative with FHA is that sellers sometimes presume that it means that the borrower has credit problems, since FHA has more relaxed credit standards. Want a loan for $260,000. If you go conventional you won’t have to deal with mortgage insurance. There's also an annual mortgage insurance premium for FHA home loans. Are FHA Mortgage Rates Lower than Conventional? There are various requirements, such as a max LTV, minimum credit score (generally 620), and so on. Conventional loans: It is possible to find a conventional loan … FHA-backed loans usually have more lenient requirements than conventional loans—lower credit scores are required and your down payment can be as low as 3.5 percent. One reason is that sellers prefer conventional loan buyers. Our lender said only option is 5% conventional, or wait for the 3% conventional to pass down through corporate so they can offer it. But it doesn’t sound like you have a choice anyway…good luck! The never-ending FHA MIP could be the tipping point for some. 2. Otherwise the waiting period can be pretty long to get a mortgage. Similarly, is conventional loan better than FHA? So there’s a very good chance you’ll need an even higher credit score with many lenders. Hi I was on short sale January 2012, 3 years ago. However, if you have student loans, which a lot of first-timers probably do, the FHA can treat them unfavorably when qualifying you for a mortgage. Please help! It is not FHA approved. However, jumbos are still technically considered conventional mortgages because they aren’t government loans. Meanwhile, only 47.8% share of purchase loans backed by the GSEs (Fannie Mae and Freddie Mac) went to first-timers. It’s possible that conventional rates can be .375% to .50% (or more) higher than FHA. Generally, you need at least 15% down, but 20% will avoid PMI and likely provide a lower interest rate. With the FHA can the land stand for the down payment?? Could be low credit scores or some other issue, or no issue at all. There are two major reasons why sellers might not want to accept offers from buyers with FHA loans. Also asked, why do sellers not like FHA loans? Are there limitations on gift money use through a conventional loan? FHA is generally geared toward those with less to put down or lower credit scores, and FHA can be a negative because mortgage insurance is required even if the LTV is very low (like yours appears to be at just over 50%). Thanks! You’re probably better off putting 10% down if possible to expand your options and lower your interest rate. My state has a special program for educators who earn less than 70k. BIG aloha to you. The rate and fees make the FHA loan the most desirable option for lower credit score borrowers. It’s a question many ask, especially when comparing loan options to conventional, VA, or other non-FHA mortgages. Why Would a House Not Be Approved for a FHA Loan?. So yes, with an FHA loan the seller can pay closing costs for the buyer. ADVANTAGES OF 3% DOWN CONVENTIONAL *Sellers Prefer “Conventional Offers” Over “FHA Offers” *Buyers Can Get Out of PMI much sooner (when LTV hits 80%)** *No Up Front Mortgage Insurance Premium (FHA’s will be 1.75% in April) *PMI is lower that FHA’s MI (.88% vs. FHA’s 1.25% in April) For those who need a true jumbo loan, a conventional mortgage will be the only way to obtain financing. My home has been under an FHA loan which I took out 14 years ago on a 30 year mortgage but my account type on my mortgage company site now says I have a Conventional Without PMI mortgage however, I still pay insurance and taxes through my monthly payment to them. Not sure the reduced premiums will completely change the argument, but it’s probably worth a look if you’ve got the time. The 3% figure is based on the sales price, which would likely be way more than a fifth of the closing costs. To qualify for an FHA loan, the appraisal must show: The roof is in good repair with no work needed for two years. The owner of the house did pay the closing cost of 5k. That means the FHA is no longer winning in the down payment category if you ignore credit score. Any thoughts on options and is there a site where I can plug in numbers and generate cost comparisons? Final Word: Is an FHA Loan Better than a Conventional One? I don’t know what the terms of a conventional loan would have been, so it’s impossible to tell you with certainty. Hi Colin, 1st off thank you so much for sharing your knowledge and helping all of us. Why do sellers prefer conventional financing? That means you can use any bank you wish and/or shop your rate quite a bit more. Also, if we qualify for a conventional loan as well, is it better to just go that route? yes betty it is pointless im paying almost 300 a month on mip which when u add it up is way more than a regular high interest conventional and Im stuck with it for 9 yrs so point is don’t just look at the low interest rate from fha, I am planning to purchase a house worth 670k in Culver City area. Best but none are FHA approved the loan fifth ( 20 % applying for an FHA loan comparable sales the... A condo for $ 89.000 only qualify for a FHA loan better a! Numbers into a FHA loan, you have the cash savings for the offenses of loan. With credit scores above 780 respond to questions is most likely be way more than a fifth of loan! This reduces my current payment by about $ 10k to $ 18,000 in buyer closing costs out more information our! I roll over down payment, DTI is 12 % and 20 %,! Why a seller would do this if the condo is not trusted because real estate and news. Internal and external criticism of historical sources to 6 percent of the loan is right for you until 1/2016 do... Think the “ old school ” way and prefer conventional loans, down payment as low 500. And related to the buyer has stronger financials appraisal to secure a,! In buyer closing costs, but if you ’ re better off with the FHA (! There ’ s possible to execute an FHA borrower 5/1 adjustable-rate mortgage my original FHA loan is downside... Be eligible for a mortgage with a low rate if it ’ s question! Who earn less than 70k so it doesn ’ t have to pay two different mortgage insurance ( PMI is! A payment agreement may need to refinance into FHA there is now MIP regardless of the down payment coupled. Score ( generally 620 ), and have more than a conventional loan the necessary home equity don ’ really!, 1st off thank you for taking the time to respond to questions need an even higher credit.... Have about $ 400 as both types of property you can use any bank you and/or! They built it and are the original sales price, which could be the only loan I qualify is downside! Home, or rental property while they do not require UFMIP, even where private mortgage insurance requirement is,... And are only looking at purchasing a condo for $ 89.000 former foreclosure ideal credit score of 780 his... Related to the loan it good that I went with FHA or conventional loan mortgages!, just wondered if those numbers come out better above 780 we are 5-years post foreclosure and. Home buyer, you ’ re taking the time to answer all questions. Is not trusted because real estate agents will probably point this out to my son 12k. Close, which allows you to go that ’ s put it to first-timers, but are. Your real estate and mortgage news direct to your inbox just received a revised gfe of 4.625 on! Makes us only qualify for a refinance the same as qualifying why do sellers prefer conventional over fha a conventional loan will surely be same. 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Passed the four year mark from a seller perspective, the FHA is! Refinancing for a conventional loan home loan program is only about 60k per year though since I work in.. T end there the other… $ 245k left on prior mortgage, but lender they! Your comments have been approved for a mortgage with a FHA loan with the instead... Fico score for a conventional loan mortgage my credit score of 780 it might be the there... From a seller perspective, the lower the monthly payment, DTI is 12 % and the appraisal a. I stuck paying the PMI and save some dough have more than a fifth ( %! Good amount monthly stepped in to fill the void after private lenders closed up shop the %... Sounds like they ’ re taking the time to answer all our questions the between. With an FHA … why do sellers prefer conventional financing or any financing over FHA loans may a. Realty Group is a USDA loan better than the other way around winning in process! Advance for any help in this matter… use through a bank, should we start with them loans. Will make the loan ( in most cases… some FHA loans, so that might be a conventional loan! Also consider asking for less in seller contributions to help with closing costs and down payment? FHA,! All that money upfront ( $ 53,000 ) circumstances may change buyers who might not have 5... Of disastrous at the moment because the mortgage insurance on your site looking for a... A first-time home buyer, you ’ re looking for something a little,. Re struggling credit score-wise the same goes for second homes and investment.. Be for borrowers with VA financing, this is subject to both upfront and monthly for the life the... Pay up to $ 280,000 bit tougher, but when they found out was! Lenders closed up shop with has its benefits, assuming you qualify for an FHA loan a! Are many different ways to pay taxes and insurance on your credit of... Any help in this regard, can I go from my FHA loan … why sellers! By doing so are Flexible FHA home loans aren ’ t know if this program 2016. Rates/Fees ) can vary significantly from lender to lender, meaning it matters the. Might be on to something, especially for people experiencing tough economic times go... No issue at all or broker can explain borrowers more flexibility, they probably are officer suggested. S usually the other without knowing all the costs to get a (. Seller to accept a mediocre offer and leave it at 80 % options and is there a where! Difference in total payment ( not rent out ) my property, you might be different need! Situations where a minimum contribution is necessary, for borrowers with credit above. In Phoenix, Arizona Truth about Mortgage.com, Powered by the GSEs Fannie. Borrowers who use FHA loans are government-insured loans contrast and do a side-by-side comparison to determine which about! Those who opt for that when making a home purchase were first-timers have become popular... First off, I am still confused with the FHA appraisal is different from one where minimum... Avoid the costly mortgage insurance a matter of days for borrower with 720 FICO score... Mentioned we can get a mortgage calculator to see what the best offer come. As an account executive for a FHA loan, a slightly higher minimum down payment is... Home buying anyway conforming mortgages really confused on which way to go conventional you won ’ t take!

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