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David Pham's Blog

By David Pham | Broker in Garden Grove, CA

Great Alternative to FHA Loans - Conventional 3% Down

FHA in general is a great program that opens doors to many home owners. However, it is a very common misconception that FHA is the only loan program available to first time home buyers with low down payments (as low as 3.5% down).

With a good FICO score, first time home buyers can still have CONVENTIONAL loan with as little as 3% down payment. Of course, the more down payment that you can put down, the better is your file.

Here are some pros if you can go the CONVENTIONAL route:

  1. No upfront mortgage insurance (MIP) of 1% - saving you right up front
  2. Lower monthly mortgage insurance (MI) - saving you every month
  3. MI can be waived when accumulated 20% equity (either by pre-paid principle, reduction in principle, or increase in property value). In FHA, MI can only be waived when accumulated 22% equity AND after 5 years.

While certain guidelines and restrictions may apply, this is a great alternative to FHA loan. Please let me know if you have any questions davidpham@nationalbrokers.net.

David Pham
National Brokers - connecting people to homes


By Douglas Zeller,  Tue Jan 11 2011, 16:42
Great to know that first time home buyers can still have CONVENTIONAL loan options!

Many seem to think FHA is the only source.
By Karen Parsons-Fiddler,  Tue Jan 11 2011, 17:46
Really? I've heard of 10% down conventional...but 3%?
By David Pham,  Wed Jan 12 2011, 10:29
Three percent down-payment would require minimum FICO of 720 in non-restricted markets. Five percent down-payment files are accepted in most markets. Orange County, CA, for example, would require 5% down and min. 680 FICO.

David Pham
National Brokers - connecting people to homes

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