We have your conventional loan needs covered.
Benefits of a Conventional Loan
Conventional loans are often the best option for buyers with good credit. About 60% of applicants opt for conventional loans.
Compared to other loans, they boast low interest rates. Furthermore, when you take on a conventional loan, you can avoid paying any mortgage insurance premiums. If you have the funds, and you have the credit, and you have a good debt-to-income ratio, a conventional loan can save you a lot of money. Conventional loans are also more flexible in terms of repayment options. There are more payment plans available than for other types of loans.
Other facts about conventional loans:
They require as little as 5% down, though if you put less than 20% down, you are required to pay mortgage insurance premiums. Available in fixed rates, adjustable rates, with terms from 10 to 30 years. You may request a removal of mortgage insurance once you have enough equity in your home, often around 78%
Other Considerations for Conventional Loans
The higher down payment required for conventional loans makes them less of an option for some homeowners. In addition, for borrowers with worse credit, a conventional loan can come with high interest rates for the duration of the loan. Conventional loans can be offered with fixed or adjustable interest rates, and the adjustable rates can sometimes vary wildly from month to month.
Typically we do not recommend conventional loans for first-time buyers or for buyers with low credit. A bankruptcy or foreclosure in the past can significantly reduce the chances of getting a good deal on a conventional loan.
Still conventional loans and other loans, such as FHA loans, are comparable for many buyers. To figure out the best possible deal for you, you may need to simply do the math and compare numbers. We can always help you figure out what benefits and programs you might be able to take advantage of. For instance, a lender credit may make an FHA loan a better deal.
If you are still unsure about how conventional loans apply to your situation call the experts at Megastar Financial. We are happy to go over the details with you and determine the loans and financial programs that best fit your needs. Give us a call and find out why we are the provider of conventional loans Redding, CA homeowners trust.
MEGASTAR FINANCIAL CORP. is an Equal Housing Lender. DBO Lic # 603 G365 NMLS Lic # 235828(3043)*
Licensed by the Department of Business Oversight (DBO) under the California Finance Lenders Act * NMLS # 1162668.
As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, sexual preference, marital status, age (provided you have the capacity to enter into a binding contract), because all or part of your income may be derived from any public assistance program, or because you have, in good faith, exercised any right under the Consumer Credit Protection Act. We are regulated by the Fair Housing Act (overseen by HUD) and the Equal Credit Opportunity Act (overseen by CFPB), Washington, DC, 20580.
Example of 30 year mortgage:
$300,000 sales price, $60,000 down payment, $240,000 loan amount, 360 months, 3% interest rate, 3.132% APR, $1,029 Principle and Interest monthly payments, Payment does not include taxes, insurance premiums or HOA dues. The actual payment amount will be greater. Rates shown valid on publication date of June 29th, 2020. This example is for a conventional, not jumbo, mortgage product; there are restrictive upper loan amounts for conventional loans based on the property’s location. Example given requires a minimum 740 credit score with a debt to income ratio of under 45%. Applicant must be employed. This is not a promise to lend. All terms and conditions are based on the subject property, the applicant’s credit worthiness and the applicant’s ability to repay the loan.
15-Year Fixed-Rate Mortgage:
The payment on a $300,000 15-year fixed-rate loan at 2.723% and 80% loan-to-value ratio (LTV) is $1,626. The annual percentage rate (APR) is 3.178%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Rates shown valid on publication date of June 29th, 2020. This example is for a conventional, not jumbo, mortgage product; there are restrictive upper loan amounts for conventional loans based on the property’s location. Example given requires a minimum 740 credit score with a debt to income ratio of under 45%. Applicant must be employed. This is not a promise to lend. All terms and conditions are based on the subject property, the applicant’s credit worthiness and the applicant’s ability to repay the loan.