813.910.8020 Apply Now

Mortgage Broker Tampa, FL | Mortgage Lender Tampa Florida | Marimark Mortgage

  • Home
  • Homebuyers
  • Homeowners
  • Realtors
  • Investors
  • About Marimark
  • Contact Us
  • Mortgages
  • Apply Now
  • Current Mortgage Rates
  • Calculators
  • Testimonials
  • Blog
  • Videos
  • Featured In
Home / Blog / FHA Loans / FHA vs. Conventional Loan

FHA vs. Conventional Loan

June 12, 2013 By Mary Catchur

Mortgages for real estate investors | mortgages to finance real estate investmentsWhat is the difference between an FHA (Federal Housing Administration) Loan and a Conventional Loan? Many people think of the FHA loan as the loan for “first-time homebuyers”. In many cases, it is true that this may be the best option for a first-time homebuyer as the down payment requirements are low and the debt-to-income ratios and credit score requirements are a bit more lenient.

However, homebuyers should not neglect to make a comparison with the various conventional loan program options. It is often incorrectly assumed that a conventional loan requires 20 percent down. While putting down 20 percent may allow you to avoid a monthly mortgage insurance payment, there are still many options for conventional loans with down payments as low as 3% and possibly lower monthly mortgage insurance payments than the FHA loan.

First, let’s look at mortgage insurance. Private Mortgage Insurance (PMI) is required by the lender on a conventional loan for borrowers who have less than 20% equity in their homes. It is insurance to benefit the lender, not the homebuyer, in the event the borrower defaults on the loan. So if you are purchasing a home and not putting down 20% you can expect to have some type of mortgage insurance, whether it is monthly, or added into the loan either through a lump-sum premium or a higher interest rate. These days there are many options for how you can pay for mortgage insurance.

FHA loans also carry their own form of mortgage insurance in what is called the UP-front Mortgage insurance premium and the Monthy Mortgage Insurance premium. The upfront mortgage insurance premium is added to the balance of the loan and the monthly insurance premium is paid monthly as part of the mortgage payment, similar to the monthly PMI option described above. Both are required in an FHA loan.

So, if they both allow low down payments and both have a monthly mortgage insurance premium, how do you know which option is better for you?!

We will perform an analysis based on your individual circumstances to determine which results in the lower monthly payment. For a borrower with excellent credit and not a lot of debt, often the better choice is the conventional loan. For a homebuyer with a bit lower credit score or higher debt in relation to their income, then the better choice is the FHA loan. But before you make a decision, you should consider all options.

At Marimark Mortgage, we will explain your options and help you find the program that best suits your needs.

Marimark Mortgage

Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.

We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.

To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application, or contact us direct.

Opt In Image
Stay Informed, It's Your Money
Marimark Mortgage Newsletter

The Marimark Mortgage Newsletter will keep you informed with important events in the mortgage industry that could impact your finances.

We especially focus on ways to save money on your current and future mortgages. And, we continually share the information we share with our clients, because we believe informed consumers are the best consumers.

Real estate agents, and other professionals in the industry, will receive an ongoing wealth of information that will help them serve their clients.

Thank you for signing up!

Filed Under: FHA Loans

Opinions, estimates, forecasts and other views contained in this page do not necessarily represent the views of Marimark Mortgage or its management and should not be construed as an offer to provide financing at the rates or terms mentioned. Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval. Although Marimark Mortgage attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. Information from this page may be used with proper attribution.

Save with a Mortgage from Marimark

Whether you are buying a home or refinancing, you can save with a mortgage from Marimark Mortgage!

    Search

    Post Categories

    Testimonials

    Refinancing with Mary an absolute pleasure

     
    Refinancing with Mary has been an absolute pleasure. I have never been through the process before and she took the time to explain each step. She was prompt (had a rate locked in right away) and most importantly always answered the phone or emails almost immediately! The communication line alone made the refinancing process every bit worth it. Would recommend to anyone, and will be back for any future purchases! Bret Brennan, March 2021
    See More Reviews
    Marimark Mortgage LLC
    5327 Primrose Lake Circle
    Tampa, FL 33647-1328
    (813) 910-8020
    (866) 910-8020

    Accessibility
    Privacy Policy
    Terms of Service
    Sitemap

    Reviews

    Website Testimonials
    Google Reviews
    Zillow Reviews
    Trulia Reviews
    Facebook Reviews
    Yelp Reviews
    BBB A+ Rating

    FOLLOW US

    • ‎
    • ‎
    • ‎
    • ‎
    • ‎
    • ‎
    Marimark Mortgage is a BBB A+ Accredited Business

    Recent Posts

    • FHA Announced a 30-Basis Point Reduction to Annual Mortgage Insurance Premiums
    • How Can You Improve Your Credit Score?
    • Historical Mortgage Rates From The 1970s
    • What You Need to Know About Mortgage Forbearance
    • Top Tips to Save Money for a Down Payment

    © 2023 Marimark Mortgage, LLC All Rights Reserved. | Internet Marketing by Image Building Media. | RSS Feed

    Reviews / Recommendations: Google, Zillow, Trulia, LinkedIn, Facebook, Yelp, BBB

    Licensed in Florida by the Office of Financial Regulation, Mortgage Lender License #MLD77.
    Licensed in Virginia by the Virginia State Corporation Commission, License MC#4556.
    Licensed in Pennsylvania by the Department of Banking and Securities, License #40222.
    NMLS#248318 – www.nmlsconsumeraccess.org.