{"id":1688,"date":"2018-04-14T09:36:02","date_gmt":"2018-04-14T14:36:02","guid":{"rendered":"http:\/\/riverbankfinance.com\/blog\/?p=1688"},"modified":"2020-03-27T16:45:14","modified_gmt":"2020-03-27T21:45:14","slug":"conventional-loan-vs-fha-loan-vs-va-loan-vs-usda-home-loans","status":"publish","type":"post","link":"https:\/\/riverbankfinance.com\/blog\/conventional-loan-vs-fha-loan-vs-va-loan-vs-usda-home-loans\/","title":{"rendered":"Conventional Loan vs FHA Loan vs VA Loan vs USDA Home Loans"},"content":{"rendered":"

When shopping for a mortgage it is a good idea to compare loan options<\/strong>. Many lenders offer a variety of home loans that might fit your needs. Each mortgage options has it benefits and weaknesses that should be considered for your individual loan needs.<\/p>\n

Lending guidelines are not the same for all mortgage lenders.\u00a0 All banks and mortgage companies operate off the same set of guidelines for the specific mortgage programs however each may have its own overlays. Lending overlays are additional conditions or interpretations of the set guidelines.\u00a0 For example, FHA loans with a 3.5% down payment allows as low as a 620 credit score but most banks and lenders add an overlay that requires a 640+ credit score.<\/p>\n

The best way to review mortgage options is to speak with a licensed loan officer that will be an expert on the loan options. They will help to review the pros and cons and assist with comparing home loans that may be the best for you.<\/p>\n

The chart below compares Conventional Loans<\/a> vs FHA loans<\/a> vs VA loans<\/a> vs USDA Rural Development Loans<\/a>.\u00a0 These are the most popular loan options that most borrowers will review. As you can see below, if you have had a recent bankruptcy or foreclosure then Conventional would not be an option.<\/p>\n

If none of these options seem to fit your life situation then a portfolio loan may be your last resort. Portfolio mortgages are home loans that do not fit the agency guidelines. They take a more common sense approach and make exceptions on loan requirements if the borrower is has financial strength in other areas. The trade off is that they typically require larger down payments and have higher rates than other loan programs.<\/p>\n

Home Loan Comparison Chart<\/h1>\n\n\n\n\n\n\n\n\n\n\n\n
August 9th, 2019:<\/strong><\/td>\nConventional Loans<\/strong><\/td>\nFHA Loans<\/strong><\/td>\nVA Loans<\/strong><\/td>\nUSDA Loans<\/strong><\/td>\n<\/tr>\n
Minimum Required Down Payment<\/strong><\/td>\n3% of Purchase Price<\/td>\n3.50%\u00a0of Purchase Price
\n(Only 1.5% required for our FHA Down Payment Assistance Program<\/a>)<\/td>\n		Zero Down<\/td>\nZero Down<\/td>\n<\/tr>\n
Annual Mortgage Insurance Rates (Paid Monthly)<\/strong><\/td>\nPrivate Mortgage Insurance (PMI) \u00a0ranges from .10 to 1.5% of the loan amount annually based on Residency Status, Credit and Loan to Value.<\/td>\nMortgage Insurance Premiums (MIP) ranges from .80% to .85 %\u00a0for\u00a0loan terms over 15 years and\u00a0.45% to\u00a0.95% for loan terms of 15 years or less.<\/td>\nNONE<\/td>\n.35% of loan amount<\/td>\n<\/tr>\n
Additional Costs<\/strong><\/td>\nIncrease to rate or loan fees based on credit score<\/td>\n1.75% Upfront Mortgage Insurance Premium added to your loan balance or paid in full at closing.<\/td>\n0% fee if Disabled Veteran or surviving spouse
\n2.15% for First VA Loan Standard Military
\n2.40% for First VA Loan National Guard or Reserves
\n3.3% Subsequent Loans<\/td>\n		1.00% Funding Fee added to your loan balance.<\/td>\n<\/tr>\n
Minimum Credit Score<\/strong><\/td>\n620+ credit score<\/td>\n530+ with 90% loan to value and 620+ for 96.5% loan to value<\/td>\n620+ credit score<\/td>\n620+ (Additional requirements including proof of Rental History under 620 score)<\/td>\n<\/tr>\n
Maximum Loan Amount<\/strong><\/td>\n$484,350 Loan Limit
\n(Read More<\/a>)<\/td>\n		$314,827 Loan Limits for Single Family Homes
\n$403,125 for Two Units
\n$487,250 for Three Units
\n$605,525 for Four Units<\/td>\n		$484,350 Loan Limit<\/td>\n$484,350 Loan Limit<\/td>\n<\/tr>\n
Allowable Seller\u00a0<\/b><\/span>Contributions<\/b><\/span><\/td>\n\n

Principal Residence & Second Homes
\nLTV Greater than 90% = 3%
\nLTV 75.01-90% = 6%
\nLTV 75% or less = 9%<\/p>\n

Investment Properties
\nALL LTV ratios = 2%<\/p>\n<\/td>\n

6% Seller\u00a0Contributions payable\u00a0towards Buyer Closing Costs and Pre-Paid items.<\/td>\n4% Seller\u00a0Contributions payable\u00a0towards Buyer Closing Costs and Pre-Paid items.<\/td>\nUSDA sets no maximum however most lenders set 6% Seller\u00a0Contributions payable\u00a0towards Buyer Closing Costs and Pre-Paid items.<\/td>\n<\/tr>\n
Required Waiting Period after Bankruptcy<\/strong><\/td>\nChapter 7 requires 4 Years from discharge date
\nChapter 13 requires 2 Years from discharge date<\/td>\n		Chapter 7 requires 2\u00a0Years from discharge date
\nChapter 13 requires 1\u00a0Years from discharge date<\/td>\n		Chapter 7 requires\u00a02\u00a0Years from discharge date
\nChapter 13 requires\u00a01\u00a0Years from discharge date<\/td>\n		Chapter 7 requires\u00a02\u00a0Years from discharge date
\nChapter 13 requires\u00a01\u00a0Years from discharge date<\/td>\n<\/tr>\n
Required Waiting Period after Foreclosure<\/b><\/span><\/td>\n\n

7 Years from Completion<\/p>\n<\/td>\n

3 Years from Completion<\/td>\n2 Years from Completion<\/td>\n3 Years from Completion<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To review home loan options with a Licensed Loan officer simply complete the form below to request a free consultation or call us now at 1-800-555-2098.<\/p>\n\n

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