If you have a down payment of less than 20% does that automatically mean you have to have an FHA loan?
I am a first time home buyer and was recently told that if I put less than 20% down i would not qualify for a conventional loan and would have to go with an FHA therefore requiring PMI. I have a very good credit rating and was just curious if this was indeed the case. by stephpacker0924 from Portage, Michigan. Sep 25th 2009
James Mucci (James Mucci)
#1 ranked lender in Michigan - 4 contributions
That is simply not true. Conforming loans (Fannie Mae/Freddie Mac) will allow as little as 5% down payment, depending on your qualifications and the location of the home you want to purchase. There will however be a requirement for Private Mortgage Insurance (PMI) on the loan, as opposed to the FHA mortgage insurance. The best advise is to compare the two options side by side, and then choose which works best for you.
Joshua Crater (Rate1st.com)
#203 ranked lender in California - 47 contributions
No, that is not true. You can do conventional financing as long as you put 10%+ down. If you have good credit scores, over 720, I would look at doing conventional financing to avoid the FHA upfront mortgage insurance fee of 1.75% of the loan amount. Regardless of FHA or Conventional, you would obviously have the monthly mortgage insurance. I'd like to speak with you in more detail about the options you have. - Brock R. Hicks, C.M.P.S. / Financial Planner / Loan Specialist - Toll Free: 1-877-RATE-1ST Direct: 949-287-4058
Ask our community a question.
Get an answer
Related Questions
