Many of the exotic types of loans vanished after the mortgage meltdown of 2007 but conventional loans were still there and, in fact, they regained a prominent position in real estate markets. Conventional loans enjoy a reputation for being safe, and there is a variety to choose from.
Most FHA mortgages require a 3.5% down payment – that’s $3,500 for every $100,000 you borrow – and the average down payment on an FHA home loan is about 5%, according to Ellie Mae. That’s far less than the 19% average for conventional home loans.
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FHA vs Conventional Loans comparison chart & Pros and Cons. Infographic looks at loan limits, credit score requirements, rates and more for both loans.
· FHA loan limits are the maximum allowed loan amount for Federal Housing Administration loans. FHA Loans are federally insured mortgages designed for middle- and working-class Americans. Because the loans are insured, lenders provide excellent rates for first time homeowners and those with poor or no credit history.
Let's see, FHA loans are for first-time home buyers and conventional mortgages are for more established buyers – is that it?
FHA vs. Conventional Loans. FHA loans allow lower credit scores than conventional mortgages do, and are easier to qualify for. Conventional loans allow slightly lower down payments.