5% down conventional loans are an excellent alternative to FHA loans that you should be looking at today. The main advantage over FHA is that you are going to have lower mortgage insurance on 5% down conventional vs. FHA. FHA has an upfront mortgage amount of 1.75% and a monthly rate of 1.25%. And that will increase April 1, 2013. 5% down conventional loans do not have upfront mortgage insurance and the monthly can be as low as .67% if you have a high credit score. This can turn out to be a substantial savings. Another advantage is that FHA loans require you to carry mortgage insurance for five years or more and until the loan balance is paid below 80% of the original purchase price. 5% conventional private mortgage insurance only requires you to carry mortgage insurance for two years and until the loan balance is paid below 80% of the original purchase price. So with a conventional loan if you feel like paying your loan balance down early, you can get rid of your monthly mortgage insurance faster.
So those are two major advantages of 5% conventional financing over FHA. There is also a 3% down conventional option available. This option carries a higher monthly mortgage insurance amount than 5% down, but it still does not have the upfront mortgage insurance required by FHA.
Conventional loan limits allow you to go up to $417,000 in Georgia. FHA is lower....
Please donâ€™t hesitate to give us a call or email if you have any questions about this or any mortgage options, 678.468.4046