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What Are The Differences Between FHA and Conventional Home Loans?

Differences between FHA and Conventional home purchase loans




– Rates usually tend to be lower
– If you have a lower credit score the mortgage insurance is less expensive than conventional
– Lower down payment of 3.5%
– Minimum credit score of 580
– Eligible for streamline refinancing (no appraisal needed)
– FHA loans are assumable (the interest rate and mortgage balance can be assumed by the new buyer)
– Shorter timeframe following major credit difficulties (3 years versus 7 years after foreclosure and 2 years versus 4 years after bankruptcy)
– Loan amount limits are set by county and generally less than conventional




– Mortgage insurance is cheaper than FHA with high credit scores
– Down payment of 5% minimum with Lender Paid Mortgage Insurance
– Minimum credit score of 620
– Conventional loans can be used to purchase investment properties and second homes
– Can cover higher loan amounts


If you have any questions about doing a FHA or Conventional Mortgage – please contact me today for a free consultation.





IMG_1722lizElizabeth Welch NMLS 1618684
Company NMLS 117273
210 South Main Street
Middletown CT 06457


FHA Disclosure


NMLS# 117273, Northeast Financial, 860-788-7237


The principal and interest payment on a 203,500 30 year FHA fixed rate loan at 3.25% on 96.5% loan to value is 1,025.99 with 0 points due at closing. The APR is 4.491%. Payments include a one time upfront mortgage insurance premium (MIP) at 1.75% of the base loan amount and monthly MIP is calculated at .85% of the base loan amount. The .85% monthly MIP is required for a specific period of time regardless of your down payment or equity in your home. The principal, mortgage insurance, and interest payment does not include property taxes or home owners insurance premiums, which will result in a higher actual monthly payment. Rates current as of 6/26/17