FHA Loan vs Conventional Loan - Which Loan Is Best?

Are you a first time home buyer interested in buying a house but wondering which loan is best for you? Are you trying to decide between an FHA Loan Vs Conventional Loan? What are the most recent FHA loan requirements for 2023? What are the most recent conventional loan requirements? What credit scores do you need? How much downpayment does FHA require vs Conventional? What are the pros vs cons of FHA vs conventional? In this video, we are going to discuss the 2023 FHA Loan Requirements and the 2023 Conventional Loan Requirements, answer some common questions around FHA Loans vs Conventional Loans as well as compare the monthly payments at 5% and 10% down.
✅ - Get a Referral to a Mortgage Lender or Realtor - www.jebsmith.net/referral
🏠 - First Time Home Buyer Course - www.becominghomewise.com
⏩ Watch This Next ⏩ - NEW FHA Loan Requirements 2023 - • NEW FHA Loan Requireme...
Other FHA videos you may find Helpful:
How to calcuate PMI on a FHA Loan - How to get rid of PMI - FHA Loan 2022 - • How to calcuate PMI on...
Comparing Monthly Payments on FHA vs Conventional Loan - First Time Home Buyer - • Comparing Monthly Paym...
RESOURCES:
🎙- The Educated Home Buyer Podcast -
Spotify - open.spotify.com/show/3Ho4sTO...
Apple - podcasts.apple.com/us/podcast...
NEW 2023 FHA LOAN LIMITS -
Low Cost Areas:
One-unit: $472,030
Two-unit: $604,402
Three-unit: $730,535
Four-unit: $907,920
High Cost Areas:
One-unit: $1,089,300
Two-unit: $1,394,775
Three-unit: $1,685,850
Four-unit: $2,095,200
FHA Approved Condo List - entp.hud.gov/idapp/html/condl...
FHA County Loan Limits - entp.hud.gov/idapp/html/hicos...
What is an fha loan? An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan that is provided by an FHA-approved lender.
➡ What is fha mortgage insurance? Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA requires both upfront and annual mortgage insurance for all borrowers, regardless of the amount of down payment.
➡ What is the current upfront mortgage insurance premium for fha loans? The UPMIP is currently at 1.75% of the base loan amount. This applies regardless of the amortization term or LTV ratio.
➡ How do you calculate the monthly mortgage insurance premium for an fha loan? Purchase Price x Percent of Amount Financed x 1.0175 x .0085 / 12
Example Below using a $350,000 purchase price putting 3.5% down:
$350,000 x 96.5 = $337,750
$337,750 x 1.0175 = $343,660
$343,660 x .0085 = $2,921.11
$2921.11 / 12 = $243.43 / month
FHA loan 2022 requirements
✅FICO® score at least 580 = 3.5% down payment.
✅FICO® score between 500 and 579 = 10% down payment.
✅MIP (Mortgage Insurance Premium ) is required.
✅Debt-to-Income Ratio less than 57%. (Actually you can go much higher than this)
✅The home must be the borrower's primary residence.
✅Borrower must have steady income and proof of employment.
FHA Videos You May Find Helpful:
➡FHA Loan Qualifications - First Time Home Buyer - FHA Loan 2020 - • FHA Loan Qualification...
➡FHA Pros and Cons - First Time Home Buyer - FHA Loan 2020 - • FHA Pros and Cons - Fi...
➡Buying a home using FHA - First Time Home Buyer - FHA Loan 2020 - • Buying a home using FH...
I hope you appreciate this update on fha loans for first time home buyers for the housing market 2023 california as well as this real estate market update from your local Huntington Beach Real Estate Realtor, Jeb Smith.
Please let me know your thoughts below: what are your predictions for the housing market 2023 forecast and the housing market 2023 california? After watching this video, do you believe you should be buying a home this year or if now is the best time to sell a house?
Do you believe a house market crash 2023 or real estate bubble will happen? If so, why? What are your thoughts on the Orange County real estate market and the potential real estate crash for orange county real estate?
Jeb Smith (Huntington Beach Realtor/orange county real estate)
DRE 01407449
Coldwell Banker Realty
I N S T A G R A M ➳ / jebsmith
➡T I K T O K➳ www.tiktok.com/mrjebsmith
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#HousingMarket2023 #RealEstate #FHA

[@lizardgreen2121]

Closed June first with a fha loan. Credit score 650. Home price was 310,000. Seller covered 15,000 in closing cost. I paid 11,000 total and got the rate down to 5.4%.

[@lizardgreen2121]

Total payment including insurance, taxes and pmi is 2450 a month

[@acaciawilliams5098]

Did you buy down your interest rate or seller?

[@lizardgreen2121]

@@acaciawilliams5098 with what was left over of the 15k in concessions from the seller we bought the rate down. I didn’t personally pay for it. 11k is all I payed in total for the purchase of the home.

[@BUCemAll32]

What city is this ?

[@lizardgreen2121]

@@BUCemAll32 San Antonio Texas

[@JoudaniMaria]

Great value in this video. Thanks you for making it.

[@Alessandro1983]

Love the content. KZbin is literally a university

[@TR-vh1fi]

What makes it even better is that there are amazing professors like Mr. Smith 😊 just found this channel and I'm loving it so far

[@Psalms20A21]

Thank You, very informative & helpful! Will share.

[@theasianjenn]

This was super helpful! Thank you!

[@LivingInHuntingtonBeachCA]

I'm glad to hear that you found the content useful, @theasianjenn! Thanks for your support and feel free to ask if you have any additional questions.

[@theresabell2492]

This is a great video thank u for sharing.

[@JebSmith]

Thanks for watching

[@ceciliajennifer8384]

@jebsmith thank you for the informative video. It helped us better understand both the options. What would you suggest for a someone with a good credit score and a 3% down. Also please let us know if refinancing from FHA to conventional in the future is something we need to have an eye on?

[@MaridalyBurgos]

Very good one

[@JebSmith]

Thanks

[@phatpham]

Hi Jeb, great video as always! Quick question, would you recommend to still use FHA for someone with 700+ credit score and 20% down? Or at that point just do conventional?

[@JebSmith]

Conventional would probably be best in this scenario but have a lender do a side by side comparison.

[@phatpham]

Thank you so much!

[@tarequeahmed7605]

I have a home equity loan. My monthky payment increased from $600 per month to $1688 per month. Do not know what to do. Should I sell, get new mortgage or hold on?

[@jdonez8347]

35 y.o old male, making 50k yearly pre tax. Looking to make my first home purchase and I'm curious what would be the best route. Have 50k for down and 10 for closing. Would it be possible for someone in my situation to pull this off. Fico is 774... should I pull the trigger? I doubt I can afford a 250k home solo...just lost in the world of craziness

[@afrozaakther6274]

I’m scared how and where I start ectulley

[@altidareach5068]

Thanks Jeb! I learned a lot from your video. I believe conventional loan will be better for me. I am planing to buy a home. First time buyer, my credit score is 800 and I have no other debts. I paid off my car, student loan and no credit card balance ⚖️.

[@JebSmith]

Nice.........Good stuff! Congrats!

[@afrozaakther6274]

Give me some advise I’m living Long Island bayshore

[@JebSmith]

✅ - Get a Referral to a Mortgage Lender or Realtor - www.jebsmith.net/referral 🏠 - First Time Home Buyer Course - www.becominghomewise.com ⏩ - NEW FHA Loan Requirements 2023 - kzbin.info/www/bejne/mp7YdHZ5Zbx2mck

[@Mr.SuperDuper-idk]

What’s a work around I just had to drop 22k on semi developed lot loan. Want to get a Permanent Manufactured on it. Only have Septic to further develop.

[@KAYTEEZIE]

Too fast and I’m a young espresso drinker 🤣

[@afrozaakther6274]

Hi

[@dm8392]

Hey Jeb, some one with a 760 credit score with only 5% down which would you say is the better option?

[@JebSmith]

probably FHA but have a lender run a side by side comparison.

[@lizzmcguire2095]

Can I apply for a convectional and FHA loan at the same time? then, take the best option?

[@incomeGlitch]

yes

[@afrozaakther6274]

Hello I’m interested to buy house our both score 750 +

[@pulaslala6158]

Nice 😊

[@Mr.SuperDuper-idk]

Yeah unless it’s “investment” or second property 😢

[@erincarey6086]

Why don't you add the upfront mortgage insurance rate of 1.75% on the FHA to the effective rate? The loan rate is less on FHA than conventional but that's because you're paying that upfront fee, sort of like buying down a rate on conventional. You also failed to mention that PMI drops off on a conventional loan once the LTV reached 80% vs a FHA where you pay it until the loan pays off regardless of LTV

[@JebSmith]

It's because the 1.75% is added to a loan amount and not to read interest rate therefore because nothing to do with the effective rate. That said it will reduce the amount of down payment you have in the transaction if you finance the 1.75% fee

[@Games.Gadgets.Sports]

Actually it's other way around. Pmi drops off after you pay off 20% of loan conventional it stays forever until house paid off or you refinance.

[@angelinimartini]

But MIP does drop off on an FHA loan depending on how much you put down at origination…

[@miltonfisher9122]

If I get a fha loan after the first year can I transfer the debt to my business ? If so how ?

[@JebSmith]

No.........it will stay as an fha loan.

[@TheNVSK]

Why don't you discuss USDA Rual Single Family Direct Loans? Can't make money in an expedient manner? Doesn't fit into your business model ?

[@anthonyd.jacksonjr.2139]

You can put down 50% on a home with an FHA loan and STILL get PMI?! That's wild.

[@angelinimartini]

If you put down 10% at origination, MIP drops off at year 11 on an FHA.

[@lonewolf1936]

He said "let's say you make over 10k and ur debt is 4k" like the average person makes over 150k a year 🤣 Bro you know damn well that 2023 in California makes 30k a year 🤣 gtfo