Conventional Loans

The first thing most people consider when buying a home is how they are going to cover the payments. It’s not everyday that someone can make a cash offer on a home so the typical route is via financing. There are multiple ways to finance a home with a lender but the most common option is a conventional loan. The main difference between this loan other common ones like the FHA or Va loans is that is not backed by the government.

 Types of Conventional Loans

A non-conforming loan usually has a larger limit than conforming loans and also can be known as jumbo mortgages. Since these loans are above the limits set by Fannie Mae and Freddie Mac, they don’t “conform” so they are called non-conforming loans, but they do vary based on county so it is important to research the limits in the area in which you intend to purchase.

If you are looking for a loan for a specific purpose such as investment, you might consider researching portfolio loans. Portfolio mortgages are quite a bit different than other conventional loans so their terms and features can work out for those that may not qualify for a typical loan. This means that if you happen to have stocks and bonds that can be kept in portfolio for the life of a loan, you may qualify for this type of loan even if you don’t qualify for a typical loan.

The last type of conventional loan you may want to consider f you have a lower credit score is a sub-prime mortgage. The interest rate and fees are usually higher, but they do give those with less than perfect credit a chance to still purchase a home. These come with special regulations created by the government but they are not backed by the government so they are still considered conventional loans.

Things To Consider

The primary consideration lenders consider when discussing your eligibility for a loan is your credit score and credit history as it’s going to determine your creditworthiness, which in turn is what is used to qualify you for a loan in the first place.

Many first time home buyers start looking at homes before they consider financing because they just want to see what’s out there. It’s a good idea to start thinking about a down payment as this time as well. If you are able to come up with a large down payment, you may have better options in regard to your interest rate to keep your monthly payments as low as possible.

The last thing to take into account when determining the type of loan that works best for you is why you are buying a home. If you are purchasing for the first time versus if you are looking for an investment, the type of loan is going to change based on your situation. If you want to stay in the home until it’s paid off, you’ll want to make sure your payments are consistent over the life of the loan as well unless you think you’ll be refinancing at some point.

Contact Us Today!

If you are considering buying a home have not settled on your financing options, we want to help you figure out the best options for you.  Don’t hesitate to contact us at North Star Mortgage in Jacksonville, FL today!

Conventional Loans

A Conventional Loan: Catered to Your Needs

Are you looking to purchase a home in the St. Johns, FL, area and need the help of a great mortgage broker? At North Star Mortgage Network Inc., our certified brokers work with a number of qualified lenders to find the best deal for each client’s unique situation. Conventional loans come in all shapes and sizes, with varied interest rates, down payments and terms. We will help you find a conventional loan package with fast pre-approval so you can choose the home you want and close, fast. Contact North Star Mortgage Network Inc., to schedule a free consultation about your finances and your aspirations to own a home.

Conventional Loans Vs. Nonconventional Loans

A conventional loan is “conventional” because it is not guaranteed or insured through a federal government agency. Instead, conventional loans are a two-party agreement between you, the borrower, and a private lending institution. They differ from VA loans and FHA loans, which are partially insured by the U.S. government. A great deal of mortgages that exist today are conventional loans.

Conventional Loans with Options

There are two types of conventional loans: Conforming and nonconforming. A “conforming” loan falls within the lending limits set through lending giant companies Fannie Mae and Freddie Mac. They contrast with “jumbo” or “nonconforming” loans, which exceed lending limits (usually around $420,000 or more). Conventional loans – both conforming and nonconforming – may have fixed or adjustable interest rates, meaning mortgage payments are set at a certain amount for the life of the loan, or may vary as time goes on. At North Star Mortgage Network Inc., we provide both conforming and nonconforming conventional loans.

 What’s Unique About a Conventional Loan?

Many of the conventional loans we provide have better interest rates than “nonconventional” loans that are insured by the federal government. Your unique rate depends upon a few factors, including your financial history, credit score and income. We work with several lenders to offer competitive rates to you.

Traditionally, you will need to have a down payment of at least 20% to obtain a conventional loan. You may also need to obtain private mortgage insurance (PMI), which protects you in the case of default. PMI is a three-party agreement between you, North Star Mortgage Network Inc., and a third party that insures your loan. We can help you determine what combination of PMI and down payment make the most sense for you long term.

Why Work with North Star Mortgage Inc.?

Our clients enjoy the high level of customer service we provide throughout the entire process of applying for and purchasing a home. We work with clients of all types, who are looking for different term lengths (30, 20, 15 or 10), different loan amounts (even jumbo loans), and different rates. We offer fast pre-approval for loans that big banks simply can’t push through as fast. We have worked in the St. Johns area for a long time, and we know the market here. Contact us to get started on your journey to purchase a home today.

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