First Time Home Buyer Tips: FHA vs. Conventional Mortgage

buying your first home in MariettaAre you searching homes for sale in north Atlanta for your first home? As a first time home buyer, the metro Atlanta real estate market can be overwhelming, but having an experienced Realtor by your side can help you navigate the process smoothly. One issue that is very important to consider is your mortgage.

Types of Mortgages

First time home buyers often think of FHA mortgages when buying their first home. FHA (Federal Housing Administration) mortgages usually offer borrowers lower down payments, around 3.5%, and may offer lower interest rates as well. However, they are not necessarily the best available choice for all buyers.

Most conventional mortgages are underwritten by Fannie Mae and Freddie Mac, and usually require anywhere from a 5-20% down payment. Which type of mortgage is best for you depends on your particular finances.

Conventional vs. FHA mortgages

One thing to consider when deciding on a mortgage is whether or not you will be paying a Mortgage Insurance Premium (MIP). The MIP may be required by your lender if you cannot put up the 20% down payment, and protects the lender in the event that you default on your loan.

If you are required to pay an MIP, that FHA mortgage might not be the best deal anymore. You could be better off paying 5% down with a conventional mortgage in which the mortgage insurance is included.

If you are a first time home buyer looking for homes for sale in north Atlanta, contact me, Barry Wolfert, Associate Broker at Keller Williams Realty Consultants. As an experienced real estate professional, I have the knowledge and know how to help you navigate the ever-changing metro Atlanta real estate market and find the home that is right for you.