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3% down payment loan

So am I right in that there is no more need for an FHA loan if now there is a loan available at 3%? WHo would go for FHA and 3.5% if there is 3% loan available. AM i missing something? by robert.lindley192 from , California. Feb 24th 2015 Reply


Linda Wintersteen (Linda123)
#62 ranked lender in Arizona - 1,256 contributions

it also looks at your debt to income ratios

Feb 24th 2015
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Timothy Howard (timehoward)
#70 ranked lender in Utah - 154 contributions

The biggest difference is going to the price and cost of the loan. The FHA is more expensive than a regular loan. Call me and we can talk about the differences.435.764.8709

Feb 25th 2015
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Pete Bass (PeteBass)
#30 ranked lender in Connecticut - 476 contributions

Hi Robert!The difference in a FHA and 3% down conforming loan has some differences-for the 3% loan - Must be a 1st time homebuyer, must have a credit score of 700+ or the MI ( mortgage insurance ) may be higher monthly than a FHA.Debt ratios are less than FHA. Please e-mail me with any questions at pete.bass@everbank.com - I would be happy to assist you:)

Feb 25th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,243 contributions

One borrower has to be a first time buyer to use the 3% down conventional loan, or meet income limitations based on where the home is located. If they meet those requirements a stronger buyer will be better off with the conventional loan. As pointed out above, FHA is more flexible for higher DTI and the actual rate and payment may be a little better for those without the strongest credit scores.

Feb 25th 2015
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

The 3% down is intended for First time home buyers only, but when it comes to loan pricing and acceptable credit scores, FHA is much more forgiving.. There's little difference in the interest rate from a 620 borrower vs. a 740 borrower with FHA, but it can be a huge difference when looking at conventional loan pricing, especially when it comes to the mortgage insurance premium. Also, FHA allows for a higher debt to income ratio than conventional.. 45% conventional vs. up to 56% FHA... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Feb 25th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,112 contributions

There could be many reasons. The debt to income ratio is higher for most FHA loans, the timeline that you have to wait after bankruptcy, foreclosure and short sale are less with FHA, the credit score can be lower with many lenders, the monthly (annual) mortgage insurance with FHA at 3.5% down is less than it is on a conventional loan with 3% down. It just depends on your circumstances. The best thing to do is have your local loan officer show you your options and then you can see side by side what loan would be best for your short and long terms needs. Best wishes, Sean

Feb 25th 2015
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Joe Metzler (JoeMetzler)
#19 ranked lender in Minnesota - 3,981 contributions

There are major differences between the 3.50% down FHA loan, and the 3% down conventional loan. Credit score requirements, debt-to-income, first time home buyer, etc. Any good loan officer can run the differences on your individual situation to determine not only if you qualify, but which one will be better in the short-term and long-term.

Feb 26th 2015
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Linda Thompson (LoansbyLinda)
#855 ranked lender in California - 32 contributions

Hi Robert,I see you had several responses...in addition ... FHA is not as credit score driven as other loans. It does have a funding fee and monthly insurance, however, the rates are super low. I'm also in California. Give me a call if you'd like to map out a plan.Linda 510-332-3282

Mar 4th 2015
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