FHA mortgage or conventional mortgage: Which one is best for you?
Fannie Mae Mortgage Insurance Calculator Mortgage calculator. For years, the federal housing administration was the king of the low-down-payment mortgage mountain. Now, Fannie Mae and Freddie Mac, the government-sponsored enterprises.
Conventional or traditional home loans on the other hand have no guarantees other than the borrowers credit and financial record to repay the loan. The higher risk, means banks want more assurances and greater down payment for these types of loans. Conventional and FHA loans may be “conforming” and “non-conforming”.
FHA MIP, in contrast, cannot be canceled unless a borrower with more than 20% equity refinances their mortgage into a new FHA loan. FHA vs. Conventional Loans: Loan Size Limits . One of the most important differences between FHA and conventional loans is the fact that FHA loans can only offer borrowers a certain amount of funds.