We thought we’d answer some of the most common questions about the difference between FHA loans and conventional loans, because we really believe FHA loans can be a great tool for you and your family. They can help you get into a house by getting you over hurdles that before seemed impossible – which is why we love being able to offer them when it’s a good fit. See if it sounds like an option for you!
Who is the best candidate for an FHA loan?
FHA loans are designed to help those with poor credit history, which makes it ideal for those whose credit has hit a hard time or young people looking to buy their first home without as much credit established.
How does it help?
An FHA loan is backed by the Federal Housing Association. Lenders basically are guaranteed a reduced risk in offering you a loan, because the FHA can cover lender losses should you go into foreclosure. This allows lenders to offer a better rate and lower down payment through an FHA loan that many could not have qualified for under a conventional loan. Which means more people can afford to get into the home their family needs!
Do you still pay monthly mortgage insurance?
Yes, you still will have a monthly mortgage insurance payment. However, there are ways to remove it through refinancing after you have gained enough equity in your home.
How much of a down payment do you need for an FHA loan?
FHA loans can allow your down payment to be as low as 3.5% instead of the conventional 5%.
Do you apply to the FHA directly?
No, the FHA works with FHA-approved lenders instead of working with you directly. United Faith Mortgage is approved.
I’m interested. What’s next?
FHA loans have both fixed and adjustable rate options, and rates will vary by applicant. Give us a call and we can help you decide what’s best for you and your family!
Out of all the lenders out there, we think we’re like you. We’re faith-based and family-focused, with the same values we grew up with still applied to everything we do. We’d love to help you and your family get into the home you’ve been dreaming of – and an FHA loan can help us say YES where you may have only heard no before. We can’t wait to hear from you!
Best,
Audrey
The Christian Mortgage Mom
