Purchasing a home is one of the biggest investments most people will ever make, so it is important to understand the different types of home loans available. Conventional home loans are a type of mortgage loan that is not insured or guaranteed by the government. Private lenders, such as banks and credit unions, typically offer these loans and are often the most popular choice for homebuyers.
There are many advantages to conventional home loans, including lower interest rates and more flexible terms. Here are some of the top benefits of purchasing conventional home loans:
5 Benefits of Purchasing Conventional Home Loans
- Lower Interest Rates. Conventional home loans usually offer lower interest rates than other loans, such as FHA or VA loans. This can save you money in the long run since lower interest rates mean lower monthly payments.
- More Flexible Terms. Conventional home loans also offer more flexible terms than other loan types. For example, you can choose the length of the loan, the amount of the down payment, and other features that are important to you.
- No Mortgage Insurance. Conventional home loans do not require mortgage insurance, which can help you save money in the long run. Mortgage insurance is an extra fee that is required for certain loan types, such as FHA or VA loans.
- Easier Qualifying Guidelines. Conventional home loans typically have less strict qualifying guidelines than other loan types, such as FHA or VA loans. This means qualifying for a conventional home loan may be easier than other loan types.
- More Options. Many different types of conventional home loans are available, so you can choose the one that best fits your needs. These options include fixed-rate mortgages, adjustable-rate mortgages, and jumbo loans.
The Process of Applying for a Conventional Home Loan
- Gather the Necessary Documentation. You must provide information about your income, assets, debts, and credit history. Have copies of your most recent pay stubs, tax returns, bank statements, and other financial documents handy.
- Meet with a Mortgage Lender. Once you have gathered the necessary documents, the next step is to meet with a mortgage lender. This is the person who will review your financial information and assess your eligibility for a loan. During this meeting, you will discuss your financial goals and needs, and the lender will explain the various loan products available.
- Submit an Application. After meeting with a lender, you must submit a formal loan application. This application will include detailed information about your finances, credit history, and employment. The lender will use this information to determine whether you qualify for a loan and what terms you are eligible for.
- Finalize the Loan. Once you have accepted the loan offer, the lender will start finalizing the loan. This process can take several weeks and will involve verifying the information provided in your application, ordering a home appraisal, and arranging for the closing.
The Bottom Line
There are many benefits to choosing a conventional home loan over other loan types. With lower interest rates, more flexible terms, and no mortgage insurance, conventional home loans can save you money in the long run. These loans have easier qualifying guidelines and more options, so you can find the loan that best fits your needs.
Contact Your Mortgage Specialist Today!
First Fidelity Mortgage is an esteemed provider of conventional loans in Louisville. Our selection of mortgages is designed to accommodate a range of homeowners and their individual financial needs. Contact us at (502) 657-4299 and be assisted by our professional agents.