Whats the benefit of an FHA vs a Conventional Loan – with a little fun.

This week Edgar asks a great question: What’s the benefit of an FHA vs a Conventional Loan. And since I’ve been working on videos ALL DAY, I felt like having a little fun with this one. 🙂

Uh eddie ger we are jumping to you now are you there hey are you doing there are you doing how’s it going good good y’all flash i’ve blown up i finally got her to get to you i know trust me we’ve been singing on this site is non-stop what is lit up like or is lit up all over the place not much italian telling my wives on my saturday morning coffee by the way go

Yeah yeah well edgar we appreciate you tuning into the show and and we appreciate you fighting to get in for the call yes a couple questions one for each of you the first one is i don’t know if they’ve already asked this one how does this one goes for chris how does a an fha loan benefit me as opposed to a conventional loan or vice versa what what are the benefits

Of both yes it’s a good question you know they’re both great loans and the way normally you identify the difference between an fha loan in the conventional loan has to do one of a couple of factors number one is the number one is an fha loan is three and a half percent down is your minimum down payment and you can also go down to credit scores all the way down

To a 620 very easily okay it’s capped out this year at 295 550 which is the maximum loan amount so if you’re looking at buying a home let’s say for less than 300,000 you’ve got minimal money down let’s say three and a half percent and you’re going to go ahead and your credit let’s say is less than a 660 or even a 680 you’d probably consider an fha loan and here’s

The reason why an fha loan has absolutely no hits an interest rate depending on what your credit score is and even though it does have higher mortgage insurance at those lower level this can probably be equal to the conventional market now where the conventional markets really strong is if you’re buying a home and you’re putting twenty percent down or ten percent

Down you have very strong credit let’s say a 720 or plus and your mortgage insurance is gonna be cheaper and if you’re buying a home above 300,000 but less than 4 17 then your conventional market is going to be a very good market for you right there so if they’re both really good products and they both fit their respective markets really well it really comes down

To a couple those factors credit score down payment and in the price of the home and then again those are gonna be sort of determining what we always like to try to do is run the scenarios run a scenario say okay based on what you’re looking for here’s what that scenario would look like now one of the things we tell everybody always buy a home based on what your

Budget is not on base what necessarily what you qualify for and i mean that in a good way if you qualify for 400,000 but you only want to make a thousand-dollar monthly payment then don’t want look for 4,000 our home because you’re never gonna make in that range right you know that those are some of the things we look for right there gotcha gotcha so just basically

Something that is adjusted according to your goals and the budget that you have that’s what the each product depends on anything i’m understanding that is correct that is absolutely the way it sits as a hundred percent dependent upon what you’re looking for what your goals are what your budget is where the home is and then more importantly what you qualify for

Because you know the other thing is debt to income ratio on a government loan i can go up to fifty percent debt to income ratio on a conventional loan i guys stay less than forty three so you have to also measure some of those things i think got it thanks op

Transcribed from video
What's the benefit of an FHA vs a Conventional Loan – with a little fun. By RealEstateRatPack