FHA Mortgages and Conventional Conforming Mortgages

FHA Mortgages vs. Conventional Conforming Mortgages

How do FHA Mortgages compare to conventional mortgages?
FHA Mortgages have several advantages over conventional mortgages. Conventional mortgages usually require a much larger down payment than FHA Mortgages do (Usually 20% down for conventional mortgages, 3.5% down for FHA Mortgages.) And, if you have less than perfect credit you may not qualify for many conventional mortgages and find yourself being offered mortgages with higher interest rates and/or fees than you expected. FHA-insured mortgages offer many benefits and protections that you won't find in conventional conforming mortgages including:

FHA Mortgages are Credit Flexible
FHA Loan Credit guidelines are not completely score driven. They are written in a way that provides the borrower the benefit of the doubt that there had been circumstances beyond their control in their past. Provided the borrower has recovered from those circumstances in a reasonable manner, they're generally going to be credit-eligible for an FHA Mortgage. A 640 FICO credit score is usually required to obtain an FHA Loan Approval.

FHA Mortgages Carry Great Rates, Low Monthly Mortgage Insurance
Another advantage of FHA Mortgages, as compared to a conventional mortgages, is great interest rates and lower monthly mortgage insurance (MI). Standard FHA Mortgage interest rates are usually better than a conforming 30-Year Fixed mortgage.

FHA Mortgages Have Smaller Down Payments
FHA Loan Qualifications only require a 3.5% down payment and the money can be a gift from a family member, employer or charitable organization, which other programs don't allow.

FHA Rates by Mortgageloan.com

Why choose an FHA Mortgage?

FHA Mortgage Loans require a low 3.5% down payment.
Non-occupant, co-borrower are permitted by FHA Mortgage Requirements.
FHA Mortgage Guidelines guidelines use expanded qualifying ratios.
There are no pre-payment penalty requirement for an FHA Home Mortgage.
FHA Mortgage Programs carry low fixed interest rates.
An FHA Mortgage Home Loan has lower MI premiums.
An FHA Mortgage is eligible for non-credit qualifying, streamline refinance.
An FHA Insured Mortgage is available all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards and the price is below the FHA Mortgage Limit for that area.
You can get a HUD FHA Mortgage to purchase or refinance a new or existing one to four family home in urban and rural areas.
FHA Mortgage Financing Fixed-Rate Loans are offered at terms of 15 or 30 years.

FHA Mortgage FAQ's

What is an FHA Loan?
An FHA loan provides low-cost insured home mortgage loans that suit a variety of purchasing and refinancing options.

What are FHA Loan Limits?
Today's maximum FHA Loan Limits are determined by the area where the subject property is located.

How can I qualify for an FHA Loan?
You must obtain correct FHA Mortgage Information to determine if you could qualify for today's FHA Mortgage Insurance guidelines. Certain FHA Loan Credit Score and FHA Mortgage Income guidelines must be met.

What are current FHA Mortgage Fees?
The FHA has a list of allowed fees that can be charged to the borrower on FHA Loans. These fees are referred to as allowable closing costs, and can vary from lender to lender. The FHA Loan MIP (Mortgage Insurance Premium) amounts to 1.75% of the loan amount and in usually financed in the mortgage.

Do FHA Loans have Mortgage Insurance?
FHA Loans have Monthly Mortgage Insurance on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home). FHA Mortgage Insurance (MI) is not considered FHA Loan PMI, because it is not provided by a private mortgage insurance company like on Conventional Loans. When comparing the monthly mortgage insurance rates on an FHA Mortgage vs Conventional Mortgage PMI, the FHA MI Rates are usually better.