Summary
Potential homebuyers eager to take advantage of today's low mortgage rates and relatively more affordable home prices sometimes are stymied by the prospect of accumulating a substantial down payment.
While Federal Housing Administration (FHA) loans are available with a down payment of 3.5 percent, those loans require both upfront and annual mortgage insurance payments. Conventional mortgage loans require private mortgage insurance (PMI) on loans with a down payment of less than 20 percent, but in some cases, the PMI payments along with the principal-and-interest payments will be lower than payments on an FHA loan of the same size.See the full content of this document
Extract
Loan Conditions Hinge On Size of Down Payment
"When the FHA changed their mortgage insurance premiums and the loans became more expensive, we saw an immediate shift in preference toward conventional loans," said Nathan Burch, president of McLean Mortgage Corp. in McLean. "Conventional loans with PMI can go up to 9...
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