FHA vs. Conventional - Valuable Info
Do you ever wonder about the difference between loan types, in practical numbers? Example of a recent situation following, where the clients weighed the difference between an FHA loan and a Conventional Loan. Note from the lender:
"Right now going FHA they only have to come in with $7,595.00. If we were to flip to Conventional we are now looking at a down payment of $10,850.00.
They are currently saving $3255.00 in down payment. Now the flip side to things is that going FHA they do come with less money down, and it has a better interest rate, but they will have to pay Mortgage Insurance for the life of the loan. With Conventional, Mortgage Insurance falls off when they reach a 78% equity position, which roughly calculates to 11 years paying MI."