Pros and Cons of Conventional and FHA Loans

*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.

There are pro's and con's to each mortgage loan product. Today, I'm going to take the two most common loan products and list out some of those pro's and con's.

Conventional Loans Pro's:

1. Lower Interest Rates

2. No PMI is required if a borrower has a down payment of at least 20% down

3. Mandatory 3% down payment starts you on a good journey towards building equity in your home

4. generally cost less than FHA loans

5. Fixed rate options and Adjustable rate options are both available

Conventional Loans Con's:

1. More strict with credit requirements

2. More strict with income ratios

FHA Loans Pro's:

1. More lenient with credit requirements

2. More lenient with income ratios

3. Mandatory 3.5% down payment starts you on a good journey towards building equity in your home

4. Government backed loans

FHA Loans Con's:

1. UFMIP (upfront mortgage insurance premium) is required on all loans at the time of closing, followed by a monthly mortgage insurance payment.

2. Higher interest rates

Contact me for more information on conventional loans and FHA loans.

*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.

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Brayden Ramsay NMLS #1997195

Momentum Loans NMLS #1606597