Conventional vs FHA Home Loans
It is always good to have options, and you have them with home mortgages today. The two we will compare here both have pros and cons, and are being utilized for the majority of the loans today.
Advantages of an FHA Home Loan
- Lower down payment requirements – only 3.5% down.
- Lower credit score requirements in place – only a 580 credit score.
- No chance of a prepayment penalty – pay it off fast.
- Can be cheaper closing costs, and easier to qualify.
- Great interest rates.
Advantages of a Conventional Loan
- More loan program options.
- No mortgage insurance is required as 20% down payment may be needed.
- All property types available are eligible for a conventional loan.
- No maximum loan amount exists.
- Can have more than one conventional loan at a time.
Both of the loan options work. If you find that you have lower credit scores, need a lower down payment requirement, and want good interest rates FHA is going to be the best option for you.