Are you nervous about the financial requirement to build or buy your dream home? The Potempa Team is a highly credible and affordable mortgage broker in phoenix with over 25 years of experience in lending finances. Getting a home loan cannot get easier than this; call us for details.
Who qualifies for a conventional loan?
The conventional loan is a mortgage not guaranteed by the government and is best for borrowers with a good credit score. The minimum credit score for conventional mortgages is 620-640. However, if your score is below 620, an FHA loan may be the best loan option for you. The conventional mortgage scheme uses LLPA (loan-level price adjustment) formula, which means that for those with a higher credit score, the cost of the mortgage that they pay will be lower.
To qualify for a conventional loan, you need to possess at least two years of steady employment history, a credit score of 640 and above, and mortgage payments in reserve funds for at least 2-3 months. For more information on conventional loans, get in touch with our team today.
Advantages of conventional mortgage loans
One of the biggest advantages with conventional loans is that they come in 10, 15, 20, or 25-year terms. You may need to pay a more substantial monthly payment with shorter loan terms. For a term period of 30 years, you will pay a lower monthly payment at a fixed interest which helps homeowners cover other costs associated with homeownership. Conventional loans make it the most viable option for those who won’t be residing in their house for long and want to repay their loan in the short term.
Conventional loans allow options like an adjustable-rate mortgage for its borrowers who opt for a shorter loan term. This enables loan payers to pay a much lower interest rate than paying a fixed interest throughout the loan term. Another plus is that it does not involve an upfront mortgage insurance fee irrespective of the amount of down payment. This makes conventional loans the most feasible loan option amongst other types of loans. As the #1 mortgage broker in Phoenix, we offer the best mortgage deals; call us for more information.
Is it better to get a conventional loan or FHA?
Conventional loans are best for those with a higher credit score while FHA is more apt for those with credit scores in the range of 580-640. The minimum down payment for conventional loans is 5% of the total loan amount while it is only 3.5% in an FHA loan. The interest rates are higher in a conventional loan than what FHA loan payers pay as interest. The maximum loan amount with traditional loans is 4, 24,100 while the respective counties determine the maximum amount for FHA loans.
Not sure about what home loan you should get? The Potempa Team can explain to you with all the details that you need to know regarding mortgages. We are a highly reliable mortgage broker in Phoenix; call us for loans at affordable rates.