Tampa, Florida FHA mortgages are popping. They’re excellent vehicles to bring new or first-time Tampa home buyers into home ownership, and they represent some of the best and most reliable fixed rate mortgage values on the market right now.
Trouble is, I find that a lot of borrowers have a hard time understanding exactly what makes Tampa FHA Loans different from Tampa Conforming Mortgages. The purpose of this post is to provide some clarity here.
Credit Score Requirements: FHA vs. Conventional Mortgages
One of the key differences between conventional and FHA loans is that your credit score doesn’t have to be as rock solid as it does with a conventional loan. The one thing potential Tampa FHA home loan borrowers need to keep in mind is this:
FHA backs mortgages because the borrower (you) has shown credit worthiness. In short – you pay your bills on time, all the time.
The actual score is less important. So, if you’re just starting out and have a score in the low 620s, but you’ve been consistent on all your bills, there’s a good chance you will still get approved for your FHA mortgage.
Conventional loans will require a much higher credit score to qualify than an FHA mortgage will. You can still get a conventional loan with a moderate or lower credit score, but you’ll pay for it in a higher rate or in points, should you want to get your rate down to a desired level.
Down Payment Requirements: FHA vs. Conventional Mortgages
Another great thing about Tampa FHA loans is the fact that you’re required to put down considerably less cash than a with a conventional loan. With FHA loans, you’re looking at 3.5 percent down, versus 20 percent down – on average – using a conventional mortgage.
On a related subject – future FHA loans can be made quite easy and very affordable for you in the future should you want to refinance. By opting for an FHA streamline loan – a current Tampa FHA home loan borrower can move quite easily into a new mortgage a little to no out of pocket expense.
