If you're new to the home-buying process, you've certainly come across several different types of mortgage loans while researching your alternatives. Conventional and FHA mortgages are two of the most frequent types of house loans. What are the differences between them, and when should each be used?
FHA Loans
FHA loans, or Federal Housing Administration loans, are a government-backed insurance program that makes it easier for those with bad credit or small down payments to buy a home. When a borrower is authorized for an FHA loan and the lender is approved, the federal government guarantees the lender against loan losses through the FHA. This program is particularly well-liked by first-time homeowners.
Conventional Mortgages
A conventional loan is just that: a traditional loan with greater down payments and better credit scores. Borrowers who do not put down the full 20% must purchase private mortgage insurance to lessen the risk of loss to the lender.
Are you looking for a Florida mortgage? If that's the case, call Sunshine State Mortgage at 954-757-4441 today to discuss your mortgage choices.