FHA Home Loans vs. Conventional Mortgage
So you’re in the market for a new home in Minnesota. Maybe you have somewhat of a low credit score, or perhaps don’t have the ability to put down a significant down payment of 10 to 20 percent.
Many prospective home buyers in situations like these often turn to FHA home loans, which make buying a home both possible and more affordable, at least from down payment perspective. But with FHA loans being so different than a conventional mortgage, it’s also important to understand what each has to offer, and whether or not a FHA home loan is right for you individual situation. And in order to help you make that determination, here’s a quick look at just some of the differences between a FHA home loan and a traditional mortgage.
FHA Home Loans |
Conventional Home Loans |
|
| Primary Purpose | Primary Residence Only | Primary Home; Secondary Home; Investment Property; Vacation Home |
| Down Payment | 3.5% Minumum | Varies; Usually 5% Minimum |
| Your Credit Score | Minimum 580 Credit Score | Minimum 620 FICO Score Typically Required |
| Mortgage Insurance Required? | Required | Required w/ Less Than 20% Down |
| Additional Fees? | Upfront Mortgage Insurance Premium; Usually 1.75% of the Loan Amount | Lender Dependent |
