by Michael Shotnik, Colorado Mortgage
When comparison shopping for home loan mortgage products, it’s not often clear which scenario best suits your financial needs.
In the below comparison, you’ll see a summary and explanation of why you can save a little money when going with a Conventional Loan versus an FHA loan.
|
Loan type |
FHA |
Conventional, Monthly PMI |
Conventional, |
|
Purchase price |
$300000 |
$300000 |
$300000 |
|
Interest rate |
3.875% |
4.375 |
4.75% |
|
Down payment |
3.5% |
5% |
5% |
|
Closing costs, paid at closing |
$0 |
$1,032 |
$947 |
|
Monthly Payment (P&I + PMI) |
1,717 |
$1,599 |
$1,487 |
|
Total funds due at closing |
$10,500 |
$15,607 |
$15,497 |
|
|
|
|
|
|
APR |
3.988% |
4.377% |
4.75% |
|
*Based on a 720 credit score, 43% DTI, single family residence, figures do not included taxes or insurance. |
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A conventional loan will require a little more at closing, however the loan amount is $9,566 less, and the monthly payment is substantially lower. The mortgage insurance options allow borrowers with good credit to obtain cheaper mortgage insurance versus an FHA option.
To discuss your options and get more questions answered regarding home loans, please call Colorado Mortgage at 303-800-4595.
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