One of the main differences between conventional loans and FHA loans is the credit score requirement. In general, conventional loans have stricter credit score requirements than FHA loans. For example, a conventional loan may require a minimum credit score of 620, while an FHA loan may only require a minimum credit score of 500. This can make it easier for people with less-than-perfect credit to qualify for an FHA loan.
Another key difference between the two loan types is the down payment requirement. Conventional loans typically require a higher down payment than FHA loans. For example, a conventional loan may require a down payment of at least 20 percent of the purchase price of the home, while an FHA loan only requires a down payment of 3.5 percent. This can make it easier for people who don’t have a lot of money saved for a down payment to afford a home with an FHA loan.
In addition to credit score and down payment requirements, there are other factors that can impact your ability to qualify for a conventional loan or an FHA loan. These factors include your income, employment history, and debt-to-income ratio.
Overall, the main difference between conventional loans and FHA loans is the credit score requirement and the down payment requirement. If you have good credit and can afford a higher down payment, a conventional loan may be the right choice for you. If you have less-than-perfect credit and don’t have a lot of money saved for a down payment, an FHA loan may be a better option. It’s always a good idea to talk to a broker to find out which type of loan is right for you.
Titan Lending Group has experienced mortgage professionals standing by to answer any additonal questions you may have.
