Kentucky Conventional Loan versus Kentucky FHA Loan comparison chart

fha vs conventional

Comparison chart of Kentucky FHA Loans vs Kentucky Conventional Loans for 2019

Kentucky Conventional Loan versus Kentucky FHA Loan comparison chart
KY Conventional Loan Kentucky FHA Loan
Limits Max $484,350 for all Kentucky Counties Max $314,827 for all Kentucky Counties
Required credit score 620 or higher required for Fannie Mae. You have three credit scores from Transunion, Experian and Equifax, and they take the middle score. Throw out high and low score. They take the Fico Score model 8 for Mortgage loans. Minimum score of  500 to qualify for 10% down payment. Credit scores above 580 can go with a  minimum credit score of 500. They take the middle credit score of the three credit bureaus  just like Fannie Mae.**However, most FHA lenders will not go below 620 so keep that in mind on your FHA lenders. Credit Overlays exist for lenders that choose not to participate on lower credit scores  to protect them from being cut off from FHA for delivering loans with bad loan performing quality.
Down payment Minimum down payment is 3%. 3.5% minimum down payment required, with credit scores over 580.
Mortgage Insurance No upfront mortgage insurance just monthly mortgage insurance. The monthly mortgage premiums are tied to your credit score and down payment or equity position on a refinance. They’re several different private mortgage insurance companies that compete for this business. Typically credit scores over 740 and above will get the best mi premiums as long as the debt to income ratios are under 45% to 50%-Only required for borrower making less than 20% down payment. Mortgage insurance is not for life of loan. Upfront mortgage insurance and monthly mortgage insurance is required on all loans regardless of credit score and debt to income ratio. Every borrower pays the same mortgage insurance . Mortgage insurance is figured on loan term and equity position or down payment requirements. FHA loans are for life of loan currently, but they’re some bills in congress to change this. It use to drop off at 78% ltv based on original sales price or after 5 years of mi payments. Currently 1.75% and .85% are the mi premiums for a FHA loan. Lesser premiums are available for more money down loan programs and lesser term like 15 years or less.
Bankruptcy 4-7 years removed from a Chapter 7. Chapter 13 possible after 2 years with a good pay history and 20% down payment. 2 years removed from Chapter 7. If Chapter 13 and currently in plan, then they will consider this with a 12 month history of good payments and permission from trustee. If Chapter 13 paid out, there is no waiting as long as good pay history.


American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916

— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

5 thoughts on “Kentucky Conventional Loan versus Kentucky FHA Loan comparison chart

  1. Reblogged this on Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC, USDA, Mortgage Loans in Kentucky for 2019 and commented:

    Conventional loans – these are secured by Fannie Mae or Freddie Mac and they’re also responsible for setting the program guidelines. This is one of the most common loan programs people choose when buying a house.

    Conventional loans have a First Time Home Buyer option that allows for as little as 3% down. The typical down payment for a Conventional loan is 3-5% and with a 20% down payment can avoid PMI (Private Mortgage Insurance) completely.

    Conventional loans require a 620 minimum FICO score and allow debt-to-income ratios as high as 50%. They can be more challenging to qualify for than some of the other programs and the interest rates are very credit sensitive, meaning that the lower the credit score the higher your rate will be. PMI is also credit score based, so the lower the scores the higher the mortgage insurance rates will be as well.

    Ideally suited for: 2nd home or investment property purchase. 10% or more down, or somebody with excellent credit.

    FHA loan – FHA mortgages are the second most common program when buying a house. This is a HUD/government-backed program and was originally created for people with fair to good credit or higher debt-to-income ratios. FHA loans allow down to a 520 credit score but you’ll often need a higher score to get a loan approved.

    FHA loans require a minimum down payment of 3.5% and have competitive interest rates (often better than Conventional loans), regardless of credit score. FHA allows up to a 57% debt-to-income ratio, making it easier to qualify.

    Typically, a borrower with 580-680 credit would be best suited to go with an FHA loan because the interest rate will often be lower and the MIP (Mortgage Insurance Premium) on an FHA loan is based on the loan amount and is not credit score driven.

    Ideally suited for: less money down, under 690 credit and/or higher debt-to-income ratios.

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