We here at The Scurlock Group want to help provide the most information we can to help keep you informed on the processes of the home buying experience. It’s why we reached out to a friend of ours; Victor Burek, at Churchill Mortgage who kindly sent over the following.
I love sharing a quote from our Founder and CEO, Mike Hardwick explaining our philosophy of providing custom solutions (not pre-packaged, run-of-the-mill loans) that help clients save thousands and shave years off their mortgage, ultimately giving them the opportunity to become debt-free more quickly:“The future of the mortgage industry will rely on loan officers and real estate agents that can effectively mentor home owners, helping them make confident, well-informed decisions to achieve debt-free home ownership and build wealth more quickly along the way. The Smarter Mortgage is the combination of our lending philosophy, which is to create stronger, long-term relationships, and technologies that have made communication and transparency more possible than ever. Together, this creates an unparalleled, personalized and rewarding experience for every single borrower we serve.”
Here is also a handy list with the main advantages and disadvantages of conventional loans. There are tons of differences between a conventional and FHA loan but I hope this helps simplify things!
Conventional Mortgage Benefits
- Lighter loan amounts (up to $424,100)
- No up-front private mortgage insurance (PMI)
- Flexible guidelines on the condition of the home
- PMI payments cancel when the LTV reaches 78%
- NO PMI with 80% loan-to-value ratio
- Mortgage insurance is less expensive (0.51% vs 0.85% with FHA)
- 3% downpayment for conventional 97% LTV loan Conventional Mortgage
- Higher loan amounts now up to $453,100
- Leave PMI off the 2nd line…should just say no upfront mortgage insurance; FHA has a 1.75% fee added to the loan
- Mortgage insurance is typically less expensive than FHA.
- As little as 3% down but must be a first-time buyer or not have owned a home in the past 3 years
- Disadvantages Reserve funds are often required 620 credit score requirement (higher than FHA)
- Large downpayment 5%-20% (Unless you qualify for a Conventional 97 loan which requires a 3% down payment)
- Higher interest rates More difficult to qualify for than FHA
- Reserve funds can be required in some instances
- Rates can be slightly higher
- More difficult to qualify on
NMLS ID 308026 Company NMLS ID 1591