FHA

FHA loan require an Upfront Mortgage Insurance Premium (currently 1.75% of the base loan amount). This premium is typically financed into your total loan amount but can also be paid upfront at closing.

FHA also requires an ongoing Annual MIP, which is paid in monthly installments (shown in your payment breakdown). The estimated rate (%) and annual amount ($/Year) displayed are based on current FHA guidelines considering your loan term, base loan amount, and Loan-to-Value (LTV) ratio according to the detailed chart factors.

FHA loans are insured by the government and are primarily designed for applicants with lower credit scores. They include upfront and monthly mortgage insurance, regardless of down payment.

Conventional loans are not directly government-backed and generally require higher credit scores, but they allow for as little as 3% down for first-time buyers and may offer lower overall costs for well-qualified borrowers.

We evaluate both options for each client based on qualifying factors and the specific loan scenario.

FHA guidelines technically allow for approval with a credit score as low as 500, but with important conditions. Borrowers with scores between 500–579 must put at least 10% down, while those with 580 or higher can qualify with just 3.5% down.

That said, the vast majority of lenders and brokers require a minimum of 580-600 due to operational risk and secondary market investor guidelines.

FHA appraisals must confirm the home meets minimum property standards for safety, security, and soundness, issues like peeling paint, missing handrails, or broken windows must be corrected before closing. The requirements are slightly more strict than Conventional loans.

FHA loans require as little as 3.5% down with a credit score of 580 or higher. Subject to change.

The user experience with a Mortgage Broker and bank/retail lender is the same in many ways, you work directly with us and our loan officers, just as you would with the loan officers at a bank/retail lender. The key difference is where your loan is funded and how that impacts your options, rates, and costs.

When you work with a bank or direct to consumer retail lender, you’re limited to that institution’s loan products, rates, and guidelines.

As a Mortgage Broker, we still handle the entire process, but instead of using a single bank’s products, we access wholesale mortgage lenders that fund the loans. These lenders don’t work directly with consumers, they provide funding through brokers like Murray Mortgage Solutions, allowing for lower rates, reduced fees, and a wider range of loan options.

So while the process may feel similar, working with a Mortgage Broker not only provides access to better rates and lower fees but also delivers a more personalized, flexible, and streamlined experience tailored to your needs. Visit our “What is a Mortgage Broker” on our Insights Page to learn more.