FHA over Conventional loan

[Krystof Pilisiewicz]

Hi,

You probably heard this question many times, but I`m puzzled what should I do.
I am working on a loan for a 2-family house in Queens, New York that I`m planning to purchase. After speaking with my mortgage broker, she tells me that she can get me a rate of 4.6% for a conventional loan and that is a great deal. I already own a 2 family house, but I`m planning to move out to the new house and use this as a primary residence.

She tells me that she can get me an FHA loan for 4.7% (3.7% +1%) and I would have to pay only 5% instead of 20% if I decide to take the conventional loan.

Do you think 4.6% for a conventional loan is good? Would you rather take the FHA loan and keep 15% in the pocket since you do not have to go with 20%? I`m not sure what to do.

Any help would appreciate it.

Thank you,

Kris