For many years, FHA loans have been the home mortgage program of choice for first time home buyers, as they offer only a 3.5% minimum down payment requirement and historically offered looser credit standards than conventional loans.
However, in recent years, as FHA mortgage insurance rates have gotten more expensive, a shift has taken place, making conventional home loans just as, if not more attractive for most home buyers, looking to put down a smaller down payment on a home purchase.
With the recent announcement that Fannie Mae has reduced the minimum down payment from 5% to 3%, when using a conventional home loan, to purchase a home, the conventional home loan is even more attractive for many buyers.
In addition, with just a 5% down payment, conventional loan programs exist that allow home buyers to eliminate monthly mortgage insurance payments altogether, through lender paid mortgage insurance or a onetime upfront mortgage insurance payment.
Over the life of the loan, for many buyers in the current market, Conventional loans could actually save a significant amount of money over FHA loans.
In the end, it means that potential homeowners should educate themselves about all of the potential home loans options available. While FHA mortgages still offer very low interest rates and may be the best mortgage product for some homeowners, they are not necessarily the best fit for all potential homeowners. Conventional loans with loan down payment have officially made a strong comeback and offer some of the most affordable options for potential homeowners.
For more information on current programs for existing and potential homeowners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Equal Housing Lender - Strategic Mortgage AZBK#0909514 - NMLS#158804 –
Vasilios Bill Kamboukos - NMLS#160440
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