FHA Loans vs. Conventional Home Loans
The main difference between a FHA Loan and a Conventional Home Loan is that a FHA loan requires a lower down payment, and the credit qualifying criteria for a borrower is not as strict. This allows those without a credit history, or with minor credit problems to buy a home. FHA requires a reasonable explanation of any derogatory items, but will use common sense credit underwriting. Some borrowers, with extenuating circumstances surrounding bankruptcy discharged 3-years ago, can work around past credit problems. However, conventional financing relies heavily upon credit scoring, a rating given by a credit bureau such as Experian, Trans-Union or Equifax. If your score is below the minimum standard, you may not qualify.
More FHA info:
- What is an FHA Loan?
- FHA Loans vs. Conventional Home Loans?
- If I've had a Bankruptcy in Recent Years, Can I Get an FHA Loan?
- What Documents are Needed to Apply for an FHA Loan?
- How Big an FHA Loan Can I Afford?
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