- Down payment. The FHA loans only require 3.5% down vs conventional loans which typically require between 10% to 20% down depending on rate. Also FHA allows for down payment gifted from a family member, a governmental agency, or a nonprofit organization.
- Mortgage Insurance Premium. FHA loans require a mortgage insurance and thus FHA borrowers are required to pay a mortgage insurance premium. Many conventional loans do not require a mortgage insurance premium if a large enough down payment is made.
- Credit Qualification Criteria. It is easier to qualify for a FHA loan than a conventional loan.
- Total Loan Amount Limits. The loan limits for a FHA loan are typically less than those of a conventional loan.
When deciding between getting an FHA approved loan or a conventional loan there are many factors that go into this decision. The primary ones in the past have been
The current homeowner should contact the servicing bank to make sure of the exact procedure and costs. For loan originated after December 1986, the new buyer that wants to assume must be credit worthy. Below is a summary of the usual requirements based off of information I have received from one of the Lenders I have used in the past
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Greg Bryan is a realtor and an attorney in San Francisco
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