So FHA is better for you because if you cant put for conventional at least 20% you pay PMI, FHA loan is isured. I am not sure that you will have better interest rate but see what your lender will tell you. For fha you can put as much down as you want but make sure that ti have cash to cover de difference in closing cos if there is any. The only disatvantage on FHA if you want the seller to caver your closing cost is the not too many seller are agree to put cash on the closing table, even this money should be tax dedactible and you could have a problem with the appraisel because most of the sellers want to add this 6% to the price and if the price is above the market value you need to renrgotiate the contrac, so that will nerrow you pool of houses a lot. Moreover seller's contribution is not 6%, it is up to 6%. So think if you want to go after FHA.
· 1 decade ago