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Conventional & FHA

Conventional & Insured Conventional Mortgages

Before we begin discussing the various types of payment structures that are available for homeowners, it is important to determine whether you want a "conventional" mortgage. This simply means that you are choosing a mortgage loan that is not insured by the federal government but may be insured by private mortgage insurers if you make less than a 20% down payment. Conventional loans include a variety of different loan plans, including fixed-rate and adjustable-rate, along with hybrid ARMs, which we will discuss throughout this document. Conventional loans generally require a 5 percent down payment but can require as little as 3%. They are particularly beneficial for borrowers who have 20 percent or more for their down payment; if you put 20% or more down, you will not need to pay for mortgage insurance! As you might expect, a strong credit history is generally a requirement for a conventional mortgage.

Conventional mortgages are administered entirely through financial institutions such as banks. These conventional loans may be insured by private entities to lower the risk of financial losses by the bank or lending institution. However, not all conventional loans are insured. Borrowers who are seeking loans at 80 percent of the property value will not require private mortgage insurance (PMI).  A conversation with your lender can help determine whether you will need private mortgage insurance and the various mortgage insurance options.
 

FHA Mortgages

In contrast to conventional mortgages, Federal Housing Administration (FHA) loans are insured by the federal government. FHA and conventional loans differ greatly in their terms. For example, FHA loans generally are more lenient on major prior credit issues and are generally more flexible in the area of debt to income ratios which allows homeownership to be more accessible to buyers with lower incomes. FHA loans are designed to help people who might not otherwise think of themselves as homeowners! 

Our Loan Officers can help you examine your financial situation to determine whether a conventional or FHA loan will be right for your needs!

TUCKER MORTGAGE, LLC
9201 N. MERIDIAN ST., STE 200, INDIANAPOLIS, IN  46260
Toll Free:  (800) 257-1195
Direct:  (317) 472-9201
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