A conventional mortgage is a loan that is not guaranteed or insured by any government agency. It is typically fixed in its terms and rate. Government agencies such as the Federal Housing Administration (FHA), the farmers home administration (fmha) and the Department of Veterans Affairs (VA) can insure or guarantee loans.
With this score, you can likely qualify for a conventional home loan. Note a 620 FICO credit score falls within the fair range. You don’t necessarily need to have good or excellent credit to qualify.
Unless you're already a mortgage expert, picking between an FHA loan and a conventional loan can be tricky. Luckily, we're about to lay it all.
A conventional mortgage loan can also be insured. But in this case, the coverage comes from a third-party insurance company within the private sector. It does not come from the government. That’s why it’s called private mortgage insurance, or PMI. That’s the main difference between FHA and conventional home loans.
If you’re looking for a home mortgage, be sure to understand the difference between a conventional, FHA, and VA loan. By Amy Loftsgordon , Attorney Conventional, FHA, and VA loans are similar in that they are all issued by banks and other approved lenders, but some major differences exist between these types of loans.
Refinancing a reverse mortgage is similar to refinancing a conventional mortgage, says Chris Downey, president of Harbor Mortgage Solutions, a Boston-area residential mortgage company. Essentially,
FHA Loans vs. Conventional Loans It may not always seem clear whether to apply for a FHA loan or conventional loan. FHA loans have typically been known as loans for first-time homebuyers, filled with extra paperwork and complexity since it’s a government-insured program.