After 10 years of marriage, I’m still enjoying living in the first home I moved into with my husband. Buying a first home can be one of the most exciting events in a person’s life. Before making this important expenditure, people need to first sit down and determine how they will successfully finance it. After all, a home will likely be the most expensive purchase you make in your life. Talk to a loan officer and determine how much money you can reasonably borrow. Then, decide how much money you want to use as a down payment. You also must decide how many years you will finance your home for. On this blog, you will learn about the process of buying a first home with a loan.
Among all the types of loan programs you can choose, many people prefer turning to conventional mortgages. A conventional mortgage is just one of several common types of loans you can apply for when buying a house, and this type of mortgage tends to have some really good advantages over other loan programs, and here are some of those.
Closing on a conventional loan is a lot easier
One advantage of conventional loans is that they have fewer requirements that borrowers must complete in order to close. Some loan types require all kinds of inspections on the homes before the lenders will issue the loans. A conventional loan is not like this. There are few inspections needed, and there are few restrictions about the types of houses you can buy if getting a conventional loan.
The closing costs are often lower
Secondly, people prefer conventional loans because the closing costs are generally lower than the closing costs on other types of loans. This is partly because fewer inspections and steps are needed, and it is also because there is usually less paperwork involved in the deal.
The mortgage insurance costs are less
Most mortgage programs have fees for mortgage insurance or something similar. While conventional loans can require mortgage insurance, they do not always require it. When a person is able to put at least a 20% payment down on a house, there is no mortgage insurance premium to pay. Other loan types require this type of fee no matter how much a person borrows or puts down on a house.
You might be able to borrow more money than the house is worth
If you are interested in borrowing more money than the amount you are paying for the house, a conventional loan can also be highly beneficial as conventional loans allow this in certain situations. For example, if you want to remodel a house you are buying and need an extra $30,000, you could likely get approved for a conventional loan for the price of the house plus the extra money needed for the renovations. You would have to pay mortgage insurance, but this would be temporary.
In addition to all these benefits, the interest rates on conventional loans are very competitive with other loan options. If you think this might be the right type of loan for you, contact a mortgage lender like Advanced Mortgage Lenders Co today to learn more.