FHA Conventional Mortgage
Then, there’s FHA. The most basic form of FHA Mortgage is for a buyer who has a down payment of 3.5% or more, and usually for those with a higher debt to income ratio (DTI). This means the income is too low in relation to the debts, and isn’t acceptable for conventional. There is a common misconception that FHA Mortgages are only for first time home buyers. This is not the case, as you can buy more than once using a FHA Mortgage, as long as you don’t have more than 1 FHA Mortgage at a time, so you must pay off the previous one at or before closing. All FHA Mortgages have a Mortgage Insurance Premium (MIP), and if you put less than 10% down, that MIP will NEVER go away. So be careful of companies who push you towards FHA when you can qualify for Conventional and have a similar payment at closing.