Comparing Conventional &

FHA Financing

When purchasing a new home, there are several financing options to consider. Common options for financing include FHA and Conventional loans. Learning the differences between the two can be helpful in the decision-making process when it comes to financing.
FHA loans are typically used by first time home buyers, offering a better chance of obtaining financing and the program is government-insured. FHA loans will have easier credit standards when compared to a Conventional loan which can be helpful when the buyer has no credit or a lower credit score.

Advantages to FHA
FHA loans have a low down payment requirement of 3.5% and can provide approval for a low-credit score. FHA loans will typically have a lower base interest rate when compared to a conventional loan.

Advantages of Conventional Loans
With this loan type, only 3% is required for down payment and mortgage insurance is only required for loans that exceed the 80% loan to value ratio. Mortgage insurance must be included in an FHA loan, no matter the loan to value ratio.


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      Brian Steeby Realtor, St. Joseph, MO



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