The Difference Between an FHA and Conventional Loan!

Pros and Cons of FHA VS Conventional.

Mortgage and they don’t want your credit load two major changes in the lender might say no three more millions will you ask where the loans go hey all my real estate baddies and bosses today i’m going to be teaching you about fha loans and conventional loans i’m also going to be comparing them so you can see the pros and cons of each loan type for fha is typically

A first-time homebuyer loan option and with this loan option the credit score minimum ranges from about 580 to the mid 600s so what you can kind of expect if you have a score in the high 500 range to the mid 600 range then you can get access to the first time home buyer loan loan and then you can also get access to first-time homebuyer products you have grants

And different programs that are associated with this is a great product for someone who’s still building their credit they’re still working on it but just to reiterate the fha loan is a first-time home buyer type of loan the minimum credit score varies from 580 to around mid 600s i’m giving a range because they always change and they always vary and the typical

Down payment is three and a half percent of the sales price and the cons are you’re paying your mortgage insurance through the life of the loan you may be getting the first time home buyer program so you get that down payment assistance however it increases your interest rate to use these government-backed programs they also may delay the times of your settlement

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Quicker closing process then maybe you steer away from those first time home buyer programs but you’re always always good to explore your options so conventional is more traditional whenever i talk about conventional loans i always tell people to think about i was in this business program and we always had to wear suits and literally like two-piece suits and

Stockings i imagine that room of like us looking like a sea of penguins that’s what conventional loan products look like they’re pretty much more traditional they are more uniformed and buttoned up when it comes to loan types so with this is private investors so instead of it being backed by the government it’s backed by private investors so typically with these

Loan types it’s less strict when it comes to lender required repairs conventional i get this all the time that you need to do twenty percent down sometimes with conventional you can do zero percent down you can do three percent five percent ten percent twenty percent and the reason for this is because the higher your down payment the lower your interest rate

Typically and just go into your mid six hundreds to your low 700s and these are this is for people with a higher credit they’ve already established their credit for a long period of time and they want to take advantage of these low interest rates to this is that once you get you know 20 down you no longer have to pay that mortgage insurance that i was talking

About so essentially if you put 20 down in the beginning then you won’t have to pay your mortgage insurance so it’s giving convenient it’s giving i would definitely use that to put three percent down and have a lower interest rate so it’s really up to you that i’ve tend to notice is and it’s not really a con it’s just something that you should look out for is when

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It comes to the appraisal sometimes there are lender required repair the the transaction cannot move forward until this lender required repair is fixed or replaced so these are the things that you kind of want to look into when you have a fha loan some things like termites like termites would have in order for an fha buyer to move forward with that transaction

And it might not you know pop up until the appraisal happens so you have those lender required repairs that majority of the time you’ll see a lot of investors they do conventional because they can get past the repairs that need to happen or for fha or even like sometimes seasoning issues so i’ll talk about this in another video but with seasoning issues then an

Fha buyer cannot go in and buy that it only can be conventional cash you know hard money all that so these are the things that fha buyers miss out on because the seasoning issues put that put the fha buyer in a hard spot because they are not able to buy that property like the fha will not allow them to buy a property that has seasoning issues if it’s within that

90-day period i’m only at the most long-term short-term whatever your real estate goals are definitely take that as a consideration when you’re speaking to your lender speaking to your realtor so that they can get the holistic profile so they can provide you with the resources for you to be the most successful all right you guys have a great day great rest of

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Your day and i want you guys to know if you’re looking for a realtor in the dmv area specifically prince george’s county in this maryland area i am a licensed maryland agent so feel free to hit me up in the comments below like comment and subscribe and i will see you guys later

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The Difference Between an FHA and Conventional Loan! By Real Estate Baddie