Mortgage Loan Preaproval

[Dimitar Popov]

Hello BP members,

I would like to share my current experience with mortgage preaproval letters from lenders. 

When I first started the process I got preapproved for a conventional loan with 5% down. However if I was to buy anything different than a single family home I would have to put 20% down because they are considered investment and at higher risk. My mortgage broker shared with me that I could also apply for FHA at the same time and thus I would pay only 3-3.5% down if I purchase a duplex. This option gives me the opportunity to use the different preaproval letters depending on the case when submitting an offer.

The one thing a noticed is that with the FHA you will have to pay PMI for the duration of the entire loan unless you refinance and with conventional for the first 20% only.

Hope that helps.