Sunday, September 22, 2013

Conventional and FHA loans PROS CONS

Conventional loans and loans obtained through the Federal Housing Administration (FHA) both have their advantages and drawbacks. The major difference between the two types of financing is that conventional loans do not carry the same number of stipulations as loans secured through the FHA. However, that being said, it's more difficult to qualify for a conventional loan too. Your credit score almost has to be stellar in order to receive the funding. 

Because FHA loans are government-backed, the required down payment is lower as well as the interest rate. So, if you want to stay in your house a long time, then an FHA loan is a good loan choice as you can save a significant amount of money because of the lower interest costs. You also have more flexibility with respect to repayment with FHA financing. The FHA offers loans with fixed rates, adjustable rates, and graduated payments.

Again, if you acquire FHA financing, it's probably a good idea to obtain the funding on a house where you plan to reside for some time. Otherwise, you can be assessed prepayment penalties and other ancillary costs that can cause you some hardships financially.

Our company can provide you with further details on government-backed and conventional loans. Contact us at your convenience or visit us online for funding information. We look forward to hearing from you. 

The Lender you know and trust,

Darin Marquardt
Mortgage Consultant

Big Valley Mortgage
Senior Loan Officer
Phone: 916-716-5115
DRE License #01201281 | NMLS # 247350

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