Zeus Mortgage – FHA vs Conventional Financing 713-275-9387

What is the difference between a FHA loan and a Conventional loan? Check out this video to find out. If you are interested in learning more about the company who will give you the lowest interest rate or need help with your mortgage solutions; visit us at www.askzeus.com or give us a call at 713-ASK-ZEUS. Learn more about the differences between a FHA and Conventional Financing.

Welcome back to another episode of zeus tv i’m steven kaufman and this is my sidekick roger salinas roger the scholar salinas and today we’re talking about the benefit why would someone want to use fha over conventional financing why would they i’m um i mean who wants some government handout i’ve got good credit do i really want to get a government handout which

Might want government chase these days there are three reasons that i’ve identified today why someone would want to be able to what wants to use an fha loan over a conventional loan the first one of course is down payment so there’s a smaller down payment requirement of an fha loan over traditional conventional financing the minimum down payment is three and a half

Percent over five percent so if someone is trying to really really cut down on how much their out-of-pocket expense that’s one i guess the thing to point out there is that it doesn’t we’re not even talking about closing costs right now which is another another benefit so it could that be three and a half that’s just call it great okay three so you have to bring

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You know for buying a two-hundred-thousand-dollar house you’re talking about bringing what seven thousand dollars to closing on the fha loan not including closing costs or if you’re doing a conventional loan you’re talking about what we’re in 10,000 10,000 tonight example that 2500 our difference could really make a difference yeah that’s right so that’s that’s

Reason number one reason number two is if someone’s credit is not as strong as so a perfect credit score in the mortgage industry the 740 and above okay so anything less than two 740 there are what we refer to in the mortgage industry has risk-based pricing so what’s the risk for this client paying back this debt back the lower the credit score the higher the risk

So it can really start to be not cost effective for l guys from i think what you’re trying to say is if you have them if you have troubled credit if you have a lower credit score you may not qualify for conventional loans or at least get the benefit of inchon them therefore fha’s a great alternative for you well you would still qualify for a conventional loan but

I would depending on how low it is but it will cost you more for conventional okay so it costs more yeah it costs more it can’t cost more and so a with with fha financing the risk-based pricing it goes away your honor and so you can still get take advantage of interest rates right now today is july 30 2012 for those of you watching interest rates are three and

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A half percent on a 30 year fha mortgage well with a credit score as low as a 620 step okay so as opposed to a conventional loan we’re depending on where you fall so a benefit is if you for fha over conventional is if you want less down payment another benefit is it is if you don’t you have a less than perfect credit than going fha get you less risk-based pricing

Which arise your lower lower overall interest rate and so what’s the third one and third reason is that the program allows for the seller to contribute for your closing costs okay it’s on an fha loan that’s all that one from you did thank you the seller can pay up to six percent as opposed to a conventional loan they can only pay half of that which is three percent

So if a home buyer wants needs help right they don’t look i’ve only got three thousand dollars what can i get into it i don’t know if it’s airily you need help i think it’s smart to roll in your closing costs i look tan okay okay so you could roll in your closing costs that rhyme or closing costs into your loan finance in essence more your closing costs on an fha

Loan because the limit six percent of the sales price we’re looking to mention alone it’s three percent so it sounds like the benefit all around if we were doing tick marks overall goes to fha yeah like okay perfect now this was a epic fha over conventional and when to use fha will do another episode in the future on when to choose conventional and who that’s meant

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For thanks for tuning in to zeus tv and we’ll see you next time

Transcribed from video
Zeus Mortgage – FHA vs Conventional Financing 713-275-9387 By askzeus