June 23rd, 2013 6:14 PM by Sherry Bitner
FHA vs. Conventional loans...Why one versus the other?
FHA has increased their Mortgage Insurance Premiums again by 10 basis points, and it now remains on the loan, for the life of the loan. This will increase the payment for a $250,000 loan by $20 per month. In reality, FHA has increased the Mortgage Insurance Premiums for a loan of this type by $154 per month since 2010. The down payment required is 3.5%.
The Conventional lenders have come up with new products to take away some of the FHA business and put it back in their hands. Private Mortgage Insurance now saves the borrower from $111 up to $220 a month over the FHA Mortgage Insurance Premium, depending on whether the borrower will put 3% down or 5% down. The other benefit options offered with the Private Mortgage Insurance is that the premium will drop off after the loan amount reaches 79%, and it can be tax deductible.
To reap the full benefits of the Conventional Private Mortgage Insurance the credit scores need to be a minimum of 680.
Planning is the most important step for the best loan products, so contact me and let's start with your new home adventure today! Sherry Bitner 941-504-1445, NMLS#197312.