Conventional mortgages are through a bank or lending institution and
are not guaranteeed through the federal government.
FHA and VA Loans are government programs which offer a lower interest rate
and/or lower down payments. There are maximum amounts which can be borrowed
under these programs and maximum fees which can be charged to process the loan.
Mortgage insurance costs less under these programs as
well.
FHA will allow a few credit blemishes where conventional loan lenders are
more strict.
An alternative to paying for private mortgage insurance (PMI) altogether is to
get an 80/10/10 loan. You get a first mortgage for 80% of the loan and second
loan for 10% of the total. You will not pay PMI and the amount of the 2nd
mortgage is tax deductible, PMI is not.
You must have served in the military to qualify for a VA Loan.
|
