A conventional home loan is not guaranteed by government organization such as FHA. Understanding the difference between FHA and conventional home loans will help you avoid wasted time and expense. With the FHA it insures or backs loans within certain parameters while with conventional loan mortgage is not backed by any federal agency and can easily be obtained from any lender. Although it may be easy to get the conventional home loans, it's important to understand whether you are qualified. There are certain requirements to qualifying for conventional home loan. To be eligible for a conventional home loan in Fort Lauderdale your monthly housing costs must meet a specified percentage of your gross monthly income. Credit background for conventional home loan consideration should be at least a 620 FICO credit score. To be eligible you must have enough income to pay for housing costs plus all additional monthly debts.
Conventional home loans Vs FHA loans
With all the hype that comes with the FHA home loans, the benefits that come with conventional loans at numerous. At nationwide home loans we focus on giving you the best advice on loans, rates and benefits. We offer conventional home loans in Fort Lauderdale at affordable interest rates, reducing the upfront payments and giving you an interest rate that suits your monthly income. In essence, conventional loans require a down payment of 10% the original cost of the house. A great advantage accrued to conventional home loans against FHA is the equity builds up. Conventional loans require no insurance premiums unlike FHA in which borrowers are required to pay mortgage insurance premiums.
Understanding the private mortgage insurance when it comes to conventional home loans is simple. As a borrower if you make a down payment of less that 20% you are required to obtain private mortgage insurance. PMI primarily protects the lenders in the event of a loans default, in a worst case scenario it allows home buyers to acquire the property with as little as 3-5 percent down payment. The good news is that borrowers have the right to cancel the PMI once the property reaches a loan-to-value ratio. Also lenders can automatically cancel the PMI once the borrower pays down the mortgage principal of at least 78 percent.
Conventional loan terms every borrower should know
It's said that conventional loans are for those with sufficient cash and healthy financial conditions but at nationwide home loans we believe even you can get one. Lenders do look for applicants with an ability to pay, liquidity ratio and credit history to find suitable applicants. As you make your decision on settling for conventional loans here are a few things you need to understand
- Downpayment requirements- for conventional loans it is required that the home buyer invests at least 5-20% of the sales price in cash for the down payment and closing costs. At nationwide home loans our staff has credible knowledge on the down payment terms and can get you the best percentages.
- Interest rates -Interest rates are determined by the type of home loan that you qualify for and your credit score. Conventional home loans have flexible interest rates that make it easier to pay monthly.
- Type of property- I know you are aiming for your dream home and with the flexibility of conventional loans you can use the loan to finance primary residences, second homes and investment property.
- . Conventional loans after bankruptcy- Yes it happens, that you are declared bankrupt. But conventional loans do not bar you from becoming a home owner. Although the law applies but after reestablishing yourself for at least two years then you are eligible for conventional loan application.
- Maximum amount allowed- there isn't really a maximum amount but the maximum loan amount and maximum financing can be used to determine the amount. Although this is varying from county to county we got you covered with the latest in conventional home loans in fort Lauderdale.
- Conventional loan programs- there are two kinds of conventional home loan rates in Fort Lauderdale the fixed rate loans and the adjustable rate mortgage. Fixed rate mortgage means paying the same amount for the entire loan period per month. Benefits of fixed rates are that you have a constant figure to pay each month. Adjustable rate mortgages, its affected by the changing market trends and changes in payment may occur each month.
Even with the existence of FHA the benefits that come with conventional home loans is just as much better if not great. What it offers is an opportunity for borrowers to expand their income and qualifying ratios, with no prepayment penalties gives it flexibility. Taking a chance with conventional home loans in Fort Lauderdale means you can purchase primary residencies, second homes and get your feet wet with property investments. Conventional home loans are available and can be accessed through agencies or nationwide homes. Conventional home loans are the future of mortgage loans, they offer flexibility in payment. Fact is if you have good cash flow you qualify for conventional home loans. If you are planning on getting conventional home loans in Fort Lauderdale visit nationwide home loans for an in-depth consultation. In a cut throat industry we manage to give the best conventional loan rates in Fort Lauderdale.