The mortgage industry can be a confusing maze when trying to determine how much you qualify for, how much cash you need, and how to get the lowest monthly payment. The two largest families of loan programs are Conventional and FHA programs. To keep things simple, here is a list of the primary benefits to each program to help you determine what program is the best program for your circumstances when buying a home in NH:
FHA Loans
• 3.5% down payment FHA loans are a great program if you do not have a lot of cash. The down payment requirement is only 3.5% of the purchase price.
• This is a government insured program that generally provides for the lowest possible interest rate.
• FHA is more lenient on prior credit issues than most programs
• The FHA mortgage insurance is not affected by credit scores
• You can qualify for a higher purchase price with FHA’s generous Debt to Income ratio requirements.
• You are allowed to use a co-signer to help you qualify
• You can use rental income to qualify
• FHA can be used in conjunction with down-payment assistance programs
Conventional Loans
• Conventional loans require as little as 5% down.
• Borrowers with high credit scores, can benefit by discounted mortgage insurance rates that are generally lower than FHA loans.
• The more money you put down the less expensive the mortgage insurance is.
• With 20% down there is no mortgage insurance requirement
Both Conventional and FHA loans have advantages. The best way to determine which loan program fits your needs best is to call Charley Farley for a 10-minute phone conversation at 603-472-2272.
