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With fixed rate mortgages, home borrower pays the down payment and interest on the mortgage every month at the same rate. A conforming loan is a mortgage loan that conforms to GSE (government sponsored enterprises) guidelines. Basically, these are loans that meet the standard set forth by two very large mortgage trading companies: Fannie Mae and Freddie Mac. Although these two companies do not approve or disapprove the loans, they buy and sell mortgages. Most lenders sign up home borrowers for the conforming loan. Then they sell these loans to Fannie Mea or Freddie Mac. According to current Fannie Mae guidelines, if you are seeking a home for a single-family, you may qualify for over $415,000.
On the other hands, FHA loan is a federal home loan insured by the Federal Housing Administration. It is intended to provide financial assistance for borrowers with low income. FHA loans have many advantages over conventional loans such as easier credit-qualify guidelines, lower down payments, less strict regulations. FHA can assist people to get loan with little or no down payment.
Benefits of a FHA Home Loan:
- No Credit Score Requirements
- A 3 % down payment
- Low monthly mortgage insurance
- Qualify for a loan 3 years after a foreclosure
- Qualify for a loan 2 years after bankruptcy
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