If you're in the market for your first home, and you're torn between applying for an FHA loan or a conventional home loan, you owe it to yourself to choose conventional. Conventional loans provide a more streamlined approach to home loans. Here are just a few of the reasons you need to choose a conventional loan for your home purchase.
When it comes to home loans, one of the most attractive aspects of the conventional loan is the fixed rates. FHA loans often come with adjustable rates, which means your interest rate may start out low but will adjust upwards throughout the life of the loan. Those adjustments can end up costing you considerably more over the life of your loan. However, with most conventional loans, you'll be locked in to an interest rate that will remain the same. The locked-in interest rate will save you money over the course of your loan and allow you to maintain control over your household budget.
When you own a home, you need to be concerned about equity, which is the amount of your home that you actually own. For instance, if you purchase a home for $300k, and you pay off $50k, that $50k is the amount of equity you have in your home. One of the benefits of a conventional loan is that you start out with more equity in your home. That's because you'll be paying a higher down payment up front. The higher your down payment, the more equity you have in your home from the start.
When you're trying to purchase a home, the initial inspections can tie things up and cause serious problem for the process. Unfortunately, inspections are part of the process when you choose an FHA loan. However, when you choose a conventional loan, you won't have to worry about costly and time-consuming inspections. That's because conventional loans don't require them.
When you're buying a new home, you want the process to go as quickly as possible. Unfortunately, FHA loans can take quite a while to process and require a substantial amount of paperwork. That's because the approval process needs to go through a chain of departments. However, when you go with a conventional loan, you won't have to deal with as much paperwork. Not only that, but there are fewer departments that need to sign off on the approval. That's because conventional loans only require the approval of the actual lender, which means you'll get into your new home quicker.
Contact local conventional mortgage services for more information.Share