Posted on: 10th Jun, 2009 12:50 pm
example on how to process, the difference in processing conventional loans
FHA loans require low down payment (3.5%) but a conventioanl loan needs 20% down payment especially in this market.
Good luck and feel free to ask
Good luck and feel free to ask
Hi Guest,
FHA loans are insured by the Federal Housing Agency. FHA does not originate loans, it insures the loans, thereby reducing the risk of the lenders. The conventional loans are the regular loans originated by the private lenders. Some of them are owned or insured by Fannie Mae or Freddie Mac, while others are not.
Once you submit the loan application, it undergoes processing. All the information you provide on the application is thoroughly verified by the processor. He checks you bank deposits, payment history etc. He orders your credit report, examines appraisal and title report to find out if there is any property-related issues. Once the processing is complete, it is submitted to the FHA for underwriting. Conventional loans are also processed in a similar manner. But the underwriting guidelines that are followed to approve a conventional loan differ from those used by an FHA underwriter to approve an FHA loan.
FHA loans are insured by the Federal Housing Agency. FHA does not originate loans, it insures the loans, thereby reducing the risk of the lenders. The conventional loans are the regular loans originated by the private lenders. Some of them are owned or insured by Fannie Mae or Freddie Mac, while others are not.
Once you submit the loan application, it undergoes processing. All the information you provide on the application is thoroughly verified by the processor. He checks you bank deposits, payment history etc. He orders your credit report, examines appraisal and title report to find out if there is any property-related issues. Once the processing is complete, it is submitted to the FHA for underwriting. Conventional loans are also processed in a similar manner. But the underwriting guidelines that are followed to approve a conventional loan differ from those used by an FHA underwriter to approve an FHA loan.