What is the difference between FHA and conventional loans?
Based on their financial profiles, consumers qualify for several types of mortgages. The majority of mortgages are conventional loans. Others, however, are backed and guaranteed by the Federal Housing Administration (FHA). While both allow consumers to finance the purchase of a home, there are several key differences between FHA loans and conventional loans.
FHA loan is a government-backed mortgage insured by the Federal Housing Administration. FHA home loans require lower minimum credit scores and down payments than many conventional loans, which makes them especially popular with first-time homebuyers.
Conventional loan is a type of mortgage loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower.
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