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Conventional Loans

A conventional loan is a mortgage that is not guaranteed or insured by the Federal Housing Administration (FHA), the Department of Veteran Affairs (VA) or any other government agency. These loans are geared for borrowers with higher credit scores and large available funds for a down payment (typically 5-20%).

Conventional loans have products that provide borrowers more flexibility. Additionally, private mortgage insurance is removed at an LTV (loan-to-value) ratio of 80% or less.

Why Conventional?

» More streamlined processs
» Reduced or NO mortgage insurance premium
» No mortgage insurance premium equals a lower payment
» Typically higher loan limits

FHA Loans

An FHA loan is a home loan the Federal Housing Administration insures. FHA loans require a smaller down payment and lower closing costs, and allow relaxed lending standards to help homeowners who don’t qualify for a conventional mortgage. FHA loans allow a down payment of as little as 3.5% on a mortgage.

This can make it possible for lower- and middle-income borrowers to buy a house when they don’t qualify for a conventional loan, which has stricter requirements including a higher credit score and bigger down payment. The downside is mortgage insurance premiums usually last the life of the loan.

Why FHA?

» Relaxed credit qualifications
» Lowest required down payment
» Easiest to qualify
» Perfect for first-time home buyers

VA Loans

A VA loan is a home loan the U.S. Department of Veteran Affairs insures and guarantees. A VA loan remains one of the few mortgage options for borrowers who don’t have the money for a down payment. Available to millions of veterans and active military members, VA loans are easier to qualify for than conventional loans.

While these loans do not require mortgage insurance, there usually is an upfront VA funding fee, which can be rolled into the loan or paid by the seller. VA loans allow borrowers to qualify for 100% financing and a number of other benefits.