When you are applying for a loan, you have many different options to consider. One of the most noted and preferred options for many is an FHA loan. Learn what makes an FHA loan in Monroe, Louisiana at Century Next Bank and elsewhere different from a conventional loan below.
What is an FHA Loan?
This type of loan is a type of mortgage that is regulated and insured by the Federal Housing Administration (FHA). Thus, it is funding that is backed by the U.S. government, as the lenders that provide this type of loan are approved by the FHA and insured by them. This loan option offers people who may not normally qualify for other types of loans a potential avenue for funding.Our bank provides FHA loans in Monroe, LA and surrounding areas.
What is a Conventional Loan?
This type of mortgage is not insured or guaranteed by the federal government, so it has more stringent lending requirements. It does provide the option for significant flexibility in the loan repayment and interest rate structure.
Differences Between Both Types of Loans
One major difference between these two types of loans is that one backed by FHA allows for smaller down payments (the percentages can be as low as 3.5%) than what is traditionally allowed in conventional loans. Additionally, people with lower credit scores can be approved for loans backed by FHA, whereas they would often be rejected for a conventional loan. Conventional loans have larger lending caps than FHA loans.
Let the experts about Century Next Bank work with you one-on-one to determine the best type of mortgage loan for your unique situation. Century Next Bank is a Member FDIC and Equal Housing Lender.
