| Maximum Purchase Price | | | | Debt-to-Income Ratio |
| At the time of this writing, the maximum purchase | | | | For a conventional loan, your PITI (mortgage payment) |
| price for conforming conventional loan ranges from | | | | should not exceed 33% of your gross monthly income. |
| $417,000 to $729,000. This amount is updated yearly | | | | Combined debts (PITI and other recurring debt) should |
| and is dependent upon the county in which the home is | | | | not exceed 41%. View more about PITI. Your PITI |
| located. Any loan above that amount is considered a | | | | (your mortgage payment) on a FHA loan should not |
| jumbo or non-comforming conventional loan. | | | | exceed 29% of your gross monthly income. Combined |
| The maximum purchase price varies from | | | | debts should not exceed 41%. |
| state-to-state for an FHA loan. At the time of this | | | | Mortgage Insurance |
| writing, the range is $271,050 - $729,750 (again, | | | | "Private Mortgage Insurance" (PMI) is mortgage |
| depending on the home's location). Typically, FHA loan | | | | insurance for traditional loans. The rates vary and |
| limits are approximately half of what can be found in | | | | mostly depend on the amount of your down payment. |
| the conventional loan market. | | | | If you pay 20% down or more down, you are not |
| Minimum Down Payment | | | | required to carry PMI. |
| Down payments range from 0 to 20% for traditional | | | | Mortgage insurance for FHA loans is called "Mortgage |
| loans. The larger your down payment, the lower your | | | | Insurance Premium" (MIP). Much like the conventional |
| interest rate and mortgage insurance costs. Higher | | | | loan, your down payment amount will determine your |
| credit scores and larger cash reserves are required | | | | required mortgage insurance. MIP is required for all |
| for lower down payments. | | | | FHA loans though MIP rates are typically lower than |
| FHA loans are quite flexible with regards to down | | | | PMI rates for conventional loans with a similar 3% |
| payments. Generally, the minimum amount down is 3% | | | | down payment. |
| of the home's sale price. This 3% is made up of 2.25% | | | | Credit Score and Credit Rating |
| down payment and.75% paid toward FHA allowable | | | | A conventional loan generally requires a higher credit |
| closing costs. This 3% investment can be in the form | | | | score than government-backed loans. The minimum |
| of a gift from your family, church, or government | | | | score will vary depending on your down payment, |
| agency. | | | | income and cash reserves. It is best to have a credit |
| Co-Borrowers | | | | score of at least 620. There are no stated minimums |
| Conventional loans require that the owner/occupant of | | | | for FHA loans, but in most cases lenders will require a |
| the home qualify on their own without help from a | | | | credit score of greater than 600 to get an FHA loan. |
| non-occupant. FHA loans allow for the income of | | | | The higher your score; the lower your interest rate. |
| non-occupants to be used when qualifying for the loan. | | | | |