A conventional loan is the most common type of home loan. The requirements to qualify are more stringent than FHA as the lender will want to make sure you are a good credit risk since this type of loan is not backed by a government agency. Benefits include lower interest rate, less paperwork, easier to pass home inspection, and you can avoid paying personal mortgage insurance (PMI) if your down payment is large enough. An [...]
Have a valid SSN and be a legal resident of the US. Have verifiable and steady income. Have a debt-to-income ratio less than 50%. Have a minimum down payment of 3.5% (varies based on credit score). However, the money can be gifted from a family member. The property must be used as your primary residence. The property must be appraised by an FHA-approved appraiser and needs to meet certain standards.
Must pay FHA mortgage insurance - both up-front as part of your closing costs and monthly as part of your monthly payment, paid for the life of the loan. More stringent property requirements – the house must be structurally sound and meet specific standards. If it is a fixer-upper, an FHA loan might not work. Must be your primary residence – FHA loans can not be used for vacation or investment properties. Limited loan size [...]