So you want to buy a house? You probably know that you need to get a mortgage, but did you know that there are different types of mortgages? Different mortgage programs may offer different interest rates, mortgage insurance rules and regulations, credit and eligibility restrictions, and often times most important to buyers: down payment requirements.
One type of loan that offers a very competitive down payment options is the conventional loan. Down payment starts as low as 3% down but you can put as much as you would like down.
Advantages of a Conventional Loan
- Buyers can often cancel PMI (mortgage insurance) much sooner (once you have 20% equity in the house you can usually cancel your mortgage insurance).
- There is no upfront mortgage insurance premium for conventional loans
- 3% down is slightly less than the 3.5% required by FHA.
- Sellers often prefer conventional loan offers over FHA offers, which means your offer might be taken more seriously if you say that you will be financing with a conventional loan.
- If you have great credit, conventional loans often have fewer fees than FHA and RD loans.
To determine the mortgage type and down payment option that is right for you, please give us a call. We will take all of your information into account and show you which scenarios will best help you accomplish your housing and financial goals.
If you have great credit, conventional loans often have fewer fees than FHA and RD loans!