FHA loans are a fantastic homebuying program. They allow many buyers with lower credit scores and incomes to buy a home. But are there downsides to these loans?
FHA MIP is better for borrowers with lower down payments, higher debt-to-income ratios, and lower credit scores. Conventional PMI is better for borrowers with larger down payments, lower debt-to-income ratios, and excellent credit scores.
Most homes will meet both FHA and conventional property requirements, but here's what you should know about the differences between the two appraisal processes.