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Re: mortgages/loans
FHA is basically a government-backed loan. A loan insured by the Federal Housing Administration. The requirements (credit, debt-to-income ratios, etc.) are less stringent than what is required to qualify for a conventional loan. The down payment requirements are lower, too -- a buyer only needs 3.5% down (and that can be 100% gift). A buyer can also roll up to 6% of the purchase price into their loan to cover closing costs (via a seller's concession). FHA loans typically have slightly lower interest rates than conventional loans, but a buyer must always pay mortgage insurance (typically referred to as pmi) for the life of the loan. It usually works out to be a few extra hundred dollars a month to cover the pmi, depending on various factors including the amount of the loan.
Many first-time buyers take advantage of FHA loans.
Conventional loans are private sector loans, not backed by government. They are also commonly referred to as "Fannie Mae" loans. Credit and income requirements are a bit stricter, and a buyer needs to put 20% down to avoid paying pmi. Buyers can put down as little as 5% with a conventional loan if they are otherwise VERY qualified, but usually conventional borrowers put at least 10% down. Pmi with a conventional loan is not permanent... it can be removed when there is enough equity. There are rules re: gifts for down payments (buyer must have at least some of their own money). Conventional borrowers can roll in closing costs as well via a seller's concession, but if they have less than 10% down, they can only roll in up to 3% of purchase price.
A VA loan is a long-term, low or even NO down payment loan available to veterans. It's guaranteed by the Department of Veterans Affairs.
I am not sure what you mean by zero monthly mortgage insurance. I have heard of conventional buyers with less than 20% down being offered a loan where they wouldn't pay pmi. HOWEVER, in those cases, the interest rate on the loan was much higher. So make sure you are familiar with all terms of the loan if you are being offered this and make sure it is really a cost savings and not just transferring the cost from one place to another.
Of course, within these types of loans, there are different types of loan products (30 year, 15 year, fixed rate, adjustable rate). There are also rehab loan products to finance renovations.
Hope this helps!
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