FHA vs. Conventional Financing - MLS Mortgage
FHA vs. Conventional Financing
Is FHA or Conventional Financing right for you? With the myriad of loan programs and differences available today, it's hard to determine which is best. This infographic highlights some of the differences and factors to consider when making your long-term decision. We even included an example to really highlight one potential cost difference.
Do you have a significant Down Payment?
Being able to remove the Mortgage Insurance
makes Conventional
loans very appealing. Greater down payment means more savings!
DOWN
PAYMENT
Interest Rate Sensitive?
Does the allure of FHA's lower interest rates appeal to you? Don't forget to consider the upfront MI. The MI effectively makes the cost higher. For a quick comparison, check the APR.
APR
%
Do you have Good Credit?
FHA offers more
580 leniency in approval and pricing if your credit is less-than perfect.
Counting on Seller Contributions?
FHA offers up to 6%
seller-paid contributions versus up to only 3% for Conventional financing if the LTV is over 90%.
Does the home need repairs?
The FHA 203(k) program
only requires 3.5% down, versus 5% down for the comparable Conventional Homestyle Renovation.
Do you plan on living there over 5 years?
Mortgage Insurance on Conventional loans can be removed when the LTV (Loan-to-Value) reaches 78% - either by payments or appreciation.
Making additional principal payments?
$$
Making additional payments towards principal would help lower your LTV (Loan-toValue), being able to remove your Mortgage Insurance on a
Conventional loan would
result in monthly and longterm savings.
What is FHA?
The Federal Housing Authority provides Mortgage Insurance (MI) on loans made by FHA-approved lenders.
FHA
FEDERAL
HOUSING
AUTHORITY
30 years makes a difference
OVER
$42k
DIFFERENCE
HOW DO I
DECIDE?
Conventional Financing may be right for you
if you have good credit and plan to keep your home for an extended time ? consult a Mortgage Professional for additional personalization
and guidance.
FHA Financing may be right for you
if your credit has some imperfections ? consult a Mortgage Professional for additional personalization
and guidance.
NMLS#: 365483
?2015 MLS Mortgage Group
*Not an advertisement, this is an example demonstrating a possible difference between original purchase and after the home has gained value.
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