An FHA or a Conventional Loan for Your Fort Lauderdale Home?
I have written about this in the past and showed you how you can save more money by going with a Conventional loan over an FHA loan. The reason is that FHA has a one time Upfront Mortgage Insurance Premium (UFMIP) charge of 1% of the loan amount and the monthly mortgage insurance is more costly. In Fort Lauderdale and all of Florida you have to have a higher credit score in order to get a Conventional loan with less than 20% down which is typically a 680 middle credit score. In order to get the cheapest monthly mortgage insurnace premium you will want a 720 or higher middle credit score.
Another advantage of the Conventional loan is that a seller and their listing agent tend to like a buyer to be getting Conventional financing over an FHA loan. I do not pretent to be a real estate agent so make sure to always consult one. If you need a referral for a great real estate agent just give me a call or send me an email.
The one advantage of an FHA loan over a Conventional loan other than the fact that FHA’s loans aren’t as credit score driven is that they are assumable. That means as long as someone qualifies they can take over your loan. This could come into play for someone who is buying now with interest rates at historic lows and when they go to sell in 5 to 10 years it is possible that they could get a premium on the sale of their home depending on how high rates are at that time. This is speculation but I think a buyer should be aware of this option and this is the job of their mortgage professional to make them aware.
I feel if you can get a Conventional loan that it is probably the better option for a buyer but everyone’s situation is different so it should be viewed on a case by case basis.