The Conventional Mortgage is the most common loan people use when buying a home here in Venice, Florida, but is it right for you? Read this informative blog post to find out! To avoid trouble, I always recommend using a lender that has done loans in the Venice area before and understands Florida Real Estate. This will ensure that things go as smoothly as possible.
Long considered a standard in the mortgage industry, a conventional home loan is just what it sounds like, a "standard" or "normal" loan. Conventional mortgage loans are the most common loan that home buyers secure when purchasing a new home.
If you are thinking about applying for a conventional mortgage, here are some pros and cons to evaluate:
If you have a strong credit report and a score in the mid 700s this could save you money in the long run with a competitive interest rate.
Since a mortgage is a secure debt, meaning the lender can take your home if you default on payments, these loans are usually offered at lower interest rates than unsecured loans, such as credit cards.
Equity builds faster because of the higher down payment (up to 20%) you'll make upfront.
Lenders may be more likely to be flexible with terms and conditions than with a government-backed loan like an FHA or VA loan which need to follow government guidelines.
When you go for a conventional loan, your total debt plays into your approval. The actual eligibility amount may fluctuate, but expect to be denied if your debt to income ratio is more than 45%.
If you're not sure if you'll be living in your home 10 years from now, it may not be a good option since these are the kinds of loans that people pay off.
If you don't meet the minimum down payment requirement, you may have to pay for private mortgage insurance (PMI).
While the lending decision is completely in the underwriter's hands, if you've had a previous foreclosure or bankruptcy, it can likely decrease your chances of getting a conventional loan approved.
Is a conventional mortgage your best bet to land the home of your dreams? We're here to answer your questions. Contact us to learn more.