As we continue into 2024, prospective homebuyers and homeowners looking to purchase or refinance are…
1. FHA loans usually have lower interest rates than conventional loans.
There’s no guarantee that FHA-approved lenders will give you a better rate on an FHA loan than a conventional one, but they usually do.
However, credit scores have a more significant impact on the rates that a borrower pays than the difference between FHA and conventional rates. FHA borrowers with credit scores of 660 will often qualify for the same interest rate as would conventional borrowers with a score of 740, according to Carla Blair-Gamblian, a home loan consultant for Veterans United Home Loans.
2. You can get an FHA mortgage with a much lower credit score than a conventional mortgage.
Borrowers with credit scores as low as 580 can qualify for FHA financing with 3.5 percent down. Scores between 500 and 580 can be eligible for mortgages with 10 percent down.
However, Fannie Mae and Freddie Mac won’t buy home loans with credit scores under 620, so you will find it hard to get a rate below that.
3. There are different types of FHA loans.
There are several FHA loan type variations, such as home improvement loans, and reverse mortgages for seniors aged 62 and over.
Contact us here at iFinance Mortgage to find out more about how an FHA Loan can work for you!