THE ADVANTAGE OF A CONVENTIONAL MORTGAGE

Fed Rate vs Mortgage
Fed Rate vs Mortgage (Photo credit: Wikipedia)

A conventional mortgage does have its advantages.  The primary one is that with a conventional mortgage you probably won’t have to pay for the mortgage insurance upfront or for the monthly mortgage insurance you would be required to pay with an FHA loan.  As of April, 2010 the FHA requires upfront mortgage insurance of 2.25% on the loan amount, regardless of how much you put down.  As an example of what this would cost you, if you were applying for a $l00,000 mortgage, you would have to pay an extra $2,250 for the mortgage insurance upfront, plus your down payment and your other closing cost.

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