What is the Difference Between FHA and Conventional Financing?

Edmonds mortgage broker Dan Keller explains the difference between FHA financing and conventional financing. Today, I address two items that you must know and give you a FHA property guidelines cheat sheet that will save you time and money!

All right hey what’s going on this is dan keller your mortgage advisor at guild mortgage i want to welcome you to another episode of making sense of the markets today is saturday january 13th episode number 2 for 2018 super excited today because i get to share with you one of the most common conversations that i have with every new client and it’s centered around

What is the difference between an fha loan and a fannie mae or freddie mac conventional loan i’m going to give you two or three things that you absolutely need to know if you’re considering an fha loan or if you have an fha loan or if you are a real estate professional listening to this you’re gonna want to listen up you’re gonna want this information i’m going to

Share with you in a minute but first last week we had them we saw the most volatile week in regards to mortgage rates that i’ve seen in the last probably a year and a half 30-year fixed rates went up about a quarter of a percentage point it was ugly things settled down around thursday or friday but it was still ugly the damage was done so i’ll keep you posted to

See if this is a trend that we’re gonna see but rates are trending upward at this point so let’s talk about fha so when i talk about fha versus conventional financing i really spend the most amount of time talking about private mortgage insurance so with an fha loan regardless of your credit score regardless of your down payment you will have a 1.75 percent financed

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Upfront premium charge that’s financed into the loan you’ll also pay a set monthly private mortgage insurance premium fee of 0.85 percent so let’s switch gears and talk about the fannie mae freddie mac loan program there is no upfront financed fhr excuse me private mortgage insurance premium fee and the monthly private mortgage insurance premium fee is based on

Four factors your credit score your down payment your debt to income ratio and the type of property financed so it’s super important if you’re trying to figure out your your monthly private mortgage insurance premium factors on your own you’re not going to get accurate findings online doing this it’s it’s it’s difficult to do as a consumer on your own that’s why

It’s important to sit down with a professional like myself i will stack the program side-by-side i’ll give you clarity around each one of them based off of your those four factors i just talked about and help you make an educated decision so let me know if you have any questions around that the last thing and probably one of the more important things is that you

Understand what an fha loan there are numerous factors or metrics that the property has to meet in regards to the fha loan to be insurable so and that that is in regards to electrical plumbing you know the roof the foundation the septic the well the driveway access there’s there’s probably 15 factors that i’ve detailed and i’ve put it on this problems and solution

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Flyer that i made about four years ago somewhere around this video you can download this if you have any questions please let me know again if you are a consumer and you’re considering an fha loan there are options i’d love to give you in detail and provide clarity around those options if you’re a real estate professional let me know i’ll get you this information

That you can hand out to your clients and help make sure or eliminate any hurdles that you will have to jump over after you get a client under contract on a home have a great weekend i look forward to coming back to you next week bye for now

Transcribed from video
What is the Difference Between FHA and Conventional Financing? By Dan Keller