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3% Convetional Vs 3.5% FHA Downpayment

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dangcredit
New Contributor

3% Convetional Vs 3.5% FHA Downpayment

   Am in a dilemmna so for those in the know which one would you suggest. During my house hunting I am coming across alot of Non-FHA approved Townhomes. These homes are THE perfect fit for us right now. What would be the Pros and Cons of going with either of the two. We are looking at homes below $220K and have about $7-8K  for the downpayment.

 

MyFico 8 EX: 663
EQ: 665
TU: 700
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4 REPLIES 4
Anonymous
Not applicable

Re: 3% Convetional Vs 3.5% FHA Downpayment

If you have 760+ credit, the 3% down conventional will still initially be more expensive monthly, but your overall loan cost will be the same as FHA if you keep the loan for 30 years (due to the mortgage insurance eventually falling off).

 

If you plan on being in the home shorter than that or if you don't have stellar credit, 3% conventional will likely end up costing a bit more than an FHA loan.

Message 2 of 5
dangcredit
New Contributor

Re: 3% Convetional Vs 3.5% FHA Downpayment

  So then therefore FHA would be our best bet? We want to keep payments under $1500 inclusive of HOA.

MyFico 8 EX: 663
EQ: 665
TU: 700
Message 3 of 5
Anonymous
Not applicable

Re: 3% Convetional Vs 3.5% FHA Downpayment


@dangcredit wrote:

  So then therefore FHA would be our best bet? We want to keep payments under $1500 inclusive of HOA.


Yes, as long as you can get one that is FHA approved. FHA will likely be over $100 cheaper per month if your scores are in the mid-600's. Not including HOA fees, you are looking at low $1400s with an FHA loan.

Message 4 of 5
frugalQ
Valued Contributor

Re: 3% Convetional Vs 3.5% FHA Downpayment

dpeezy is correct...FHA is your best bet especially with a 660 mid score.  here's a link to the Fannie Mae approved PMI rate card and a link to the FHA MI rate guidelines.

 

http://www.fha.com/fha_requirements_mortgage_insurance

 

https://www.mgic.com/pdfs/71-61210_bpmi_monthly.pdf

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