CONVENTIONAL PURCHASE
Conventional Mortgage Programs in Florida are a Popular Choice for Home Purchases
Conventional loans are much more common than government-backed options such as FHA or VA. According to the U.S. Census Bureau, in the first quarter of 2018, conventional loans financed 74% of all new home sales.
Known as traditional programs, conventional loans conform to the requirements set by Fannie Mae and Freddie Mac. If you have money for a down payment and a decent credit history, this type of loan is more appropriate for you.
Furthermore, you may be able to avoid paying for private mortgage insurance (PMI). As a result, this can save you a lot of cash each month and over the life of the loan.
We will help you qualify for the most beneficial loan option that suits your homeownership goals and budget. Together, we will review your credit history, down payment contribution, income, and other qualifying factors.
Additionally, we will run numbers by you to determine which loan will allow you to have the most comfortable mortgage payment. The goal is to put you into a program that will give you the most financial benefits now and in the long-run.
Certainly, it is key to work with a mortgage broker who has access to various lenders and can offer numerous mortgage options. You’ll want to work with someone who is extensively familiar with all traditional loan programs.
Surely, being in the hands of a knowledgeable and responsible mortgage professional will make your home-buying experience an exciting one. Without a doubt, financing a home with a conventional loan program in Florida is made much easier with a licensed loan officer who finds creative ways to meet your needs.
Making Sound Decisions by Weighing the Pros and Cons of Conventional Loans
Conventional loans can provide an ideal financial position for many borrowers. One must still consider the drawbacks of this type of loan and make an informed mortgage decision. Like all programs, conventional loans have positive and negative points to consider:
Pros
- Higher loan limits permitted compared to government-backed loans. The loan amount will not be limited as with other loan types. This is useful if you’re looking to purchase a home in a higher-end market or want to buy a home with a more expensive sales price.
- Interest rates are available on fixed or adjustable terms. An advantage of conventional loans is the flexibility to choose either a rate that remains the same or adjusts according to market fluctuations.
- Private mortgage insurance (PMI) is not required with a loan-to-value ratio of 80 percent. Insurance is an expense that adds significant cost to your mortgage. Consequently, you will save a lot of money in the long-run if you can avoid this cost.
- Occupancy flexibility is key for conventional loans. Government-backed loans require you to occupy the home as your primary residence. Therefore, if you’re looking to buy a second home or investment property, conventional loans are great. In addition, different types of dwellings are also eligible.
Cons
- Requires a higher credit score compared to FHA standards. Besides credit scores, lenders also consider a strong income and assets as part of qualifying factors.
- A down payment of 3–20% of the sales price is required for conventional loans. Down payments less than 20% where the loan is more than 80% of the value of the home require a private mortgage insurance policy. The purpose of this type of insurance is to compensate the lender should you ever default on the loan.
- Low-income borrowers may have a more difficult time with upfront costs. There are higher upfront closing costs compared to FHA loans. Moreover, there’s a down payment requirement.
We will comprehensively look at your financial profile and determine which loan type is appropriate for you. Certainly, all details will be explained until you thoroughly understand the recommendations your mortgage specialist explains to you.
Our Florida licensed mortgage team will assist you in choosing a program with a monthly cost that feels completely comfortable for your budget. We want you to feel confident in your new financial responsibility. Owning a home should be an experience that gives you security, not one that causes stress and anxiety.
Ready to explore a conventional loan for your home purchase?
Call us at 954-507-7553 to discuss your options and get pre-approved.
Please complete the short form below so we can discuss your goals and how they can be achieved with a conventional home loan program in Florida.