Conventional Loan or a FHA Mortgage Loan Type  

Are you at a crossroads to which mortgage loan type to obtain? Well, even the best of us get confused here. So whether you are a first-time homebuyer or you are looking to refinance your mortgage, just hop in here. This piece will be discussing the better option between a conventional loan and a FHA loan.

I’m sure by now; you will already know that there are several different types of mortgage loan types. Find more information here on the factors to consider before making a choice between obtaining a conventional loan and a FHA mortgage loan.

I can imagine all the questions running through your mind right now and all the calculations you are trying to make right now. One important fact you should understand is that different situations require different types of loans. Not all loan types fit into every need.

FHA housing loans are loans that are insured by the Federal Housing Administration. They are not issued by the FHA agency, they are only insured after approved lenders have issued the loans. This loan is easy to obtain, because the interest of the lender is protected in the event of loan repayment. Conditions attached to the obtainment of the loan are quite lenient. With a down payment of 3.5% you are good to go. Your past event of bankruptcy, short sales, or even foreclosures in this mortgage plan, can be overlooked.

On the other side of the narrative, is the conventional mortgage loan. It is a stricter mortgage loan plan. Although here, the percentage of a down payment is low compared to those of FHA loans. Another good thing to the plan is the fact that it is useful for getting secondary homes and even investment properties, which is unlike FHA mortgage loans that allow for the loan to be used for only primary homes.

So bottom line, FHA is a better option over conventional loans when qualification becomes an issue in the event of low credit score. But in other cases, Conventional loans area better option especially if you have a high credit score. Learn more about home loans today at LBC solutions inc.