Conventional mortgages are the most popular form of home financing for buyers in the United States. However, it may not always be clear how these loans differ from other loans, such as those provided by government agencies. To help you gain a better understanding of conventional loan basics, here is a quick guide with further information:
When obtaining conventional financing, your lender will examine your financial situation. The loan officer may request information including your credit score, income statements and debt to income ratios.
A down payment is required for conventional loans. Each lender has different minimum requirements, but the larger the down payment, the less money you’ll have to pay back over time.
Many believe a 20% down payment is required for conventional loans, but the minimum requirement is typically much lower. You can find mortgages with minimum down payment requirements anywhere from 3% to 20% of the overall purchase price.
Your choice of down payment amount can affect the terms of your mortgage, like interest rate or the need for private mortgage insurance.
Government-backed home loans have specific features to suit some homebuyers.
The Federal Housing Administration (FHA) is a government institution offering home loans for buyers who meet certain qualifications. Government-backed loans have advantages for those with bad credit or other financial roadblocks, but require other qualifications for approval.
Conventional mortgages tend to have higher interest rates than FHA loans, although these loans typically require borrowers to pay mortgage-insurance premiums.
Interest rates charged on a conventional mortgage vary by several factors, including the term and amount borrowed. However, interest rates are also subject to change every year based on the overall economy. Many buyers choose to wait for a period when interest rates are lower to apply for a mortgage, regardless of the loan type.
Ultimately, your choice of loan will depend on your personal circumstances. The more you know about different types of mortgage, the better equipped you’ll be for your journey into thefinancial real estate marketplace.
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Community and school information for Amherst MA, Hadley MA, South Hadley MA, Hampshire and surrounding towns. You can also find the latest town and Real Estate News, up to the minute listings alerts of New Listings, Price Changes, Back on Markets, Open Houses, Virtual Tours, and much more information about Amherst MA Real Estate, Hadley MA Real Estate, South Hadley MA Real Estate, Hampshire County Real Estate and surrounding towns from my blog.
The Hampshire area schools are fantastic. Some links you may want to check out follow are below. As always, please contact me directly to help you answer questions about local schools.
www.arps.org - This site will also take you to the Leverett, Shutesbury, and Pelham schools
www.hadleyschools.org
www.nps.northampton.ma.us
www.ses.sunderland.ma.us/
www.deerfield.edu/
www.southhadleyschools.org/
