Fairway Funding Group

Unlike conventional loans, the FHA or Federal Housing Administration mortgage is backed up by a government entity, which in this case, is the FHA or Federal Housing Administration. The FHA loans can be considered as a type of federal assistance and have always helped the lower to middle-income Americans in borrowing money for purchasing a home, which was they would be unable to afford otherwise through conventional loans. The FHA loan is more pointed towards new-house owners rather the investments in real estate. One of the factors differentiating FHA loans from traditional loans is that houses in the case of FHA loan should be owner occupant for at least a year. Here are some factors differentiating FHA and conventional loans- Down Payment Requirements – The option of FHA loan has always been dominant for the home-buyers without significant cash for down payments. You can buy a home using just about 3.5% of the purchase price through FHA. Instead of where around 20% is the...

A mortgage that is not backed by any Government agency is known as conventional loan. It is preferred by many borrowers as it provide higher loan limits than any governmental agency would provide. People opt for such a loan as it is available for second home and investment properties as well, whereas a government agency only provides loan for private residences. There are certain conventional loan requirements that should be met. These include:  The minimum credit score should be between 600-620.  A primary residence, a second home, vacation property and a rental property can be financed by a   conventional loan. The property type could include; single family homes, duplexes, 2 to 4-unit properties,   condominiums and townhouses.  The borrower should have sufficient funds to cover down payments and closing costs. If you have a minimum credit score of 600 and want to avoid PMI than a conventional loan would suit you best. For people w...