FHA Loan
FHA loan does not provide loans but they simply insure the loan. 1.5% of the loan amount gets paid upfront as an insurance premium by the borrower. Determine the monthly premium that borrowers pay; you do 5% of the loan amount divided by 12 months. 3% down payment of the purchase price of your home is required and the closing fee can be included in the loan.
Conventional Loan
Conventional loans are also Fannie Mae Loans, this loan is without benefit of any government guarantee or government insurance, it is made at the risk of the lender. Borrowers must have for 2 months reserved for deposit 5% of his/her own funds for the down payment. LTV with a conventional loan of greater than 80% requires primary mortgage insurance, which can be paid monthly. Closing costs must be paid by the borrower.
For any additional information or concerns on a FHA loan or a conventional loan, contact our knowledgeable home mortgage lenders today. Our network of home mortgage lenders are well educated on all matters of home mortgage loans.
