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Are rates for conventional lower than fha

by fanmaker6486754 from Pittsburgh, Pennsylvania. Feb 13th 2015 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,727 contributions

They should be,but they're not because of GSA fees (a topic for another time). FHA rates are lower, but ALL FHA loans have an upfront mortgage insurance premium equal to 1.75% of the loan amount, and an annual premium of .85% for most 30 years loans. There's a slight reduction to .80% if you put 5% or more down, but you will pay FHA MI regardless of your down payment.. Conventional does not charge an upfront premium and the monthly premium is tiered based on your down payment, so it can be substantially lower.. if you have the credit, you're better off going conventional vs. FHA.. even though the rate is higher, the overall loan is less expensive and the payment will be lower. Even if you end up having to pay mortgage insurance on a conventional loan, it can be canceled once you have paid 2 years and once you reach 20% equity, and you wont have to refinance to do it.. with FHA, in most cases, the MI is there for the life of the loan. 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

Feb 13th 2015
George Omilan (gomilan)
#69 ranked lender in Virginia - 11 contributions

Rates are very credit score dependent. Don't confuse rates with APR's. The APR for the loan transaction is your real total cost of financing. The higher your representative score the better the rate for the category with most lenders.

Feb 13th 2015
Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,112 contributions

No, interest rates are usually lower with an FHA loan. However, you must keep in mind that you have to add 1.75% up front mortgage insurance to the loan amount (or pay up front) with an FHA loan. In addition, with FHA you will have monthly mortgage insurance for the life of the that loan. The best thing to do is have a local loan officer show you both options so you can compare them side by side to see what will be the best option. Best wishes, Sean

Feb 16th 2015
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,097 contributions

Today, an FHA loan is generally a lower rate. In the past, conventional was usually a little better. But there is so much more that figures into the question of FHA versus Conventional. Down payment size, credit scores, mortgage insurance options, etc. This is a great question for the loan officer handling your application to determine which program is right for you. For loans in MN, WI, and SD, visit

Feb 17th 2015
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