Conventional Loans in Redding CA
If you have 20% to put down, a conventional loan may be the best option for you.
Call Megastar Financial Redding, and we’ll figure out your options together.
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%
Disadvantages of Conventional Loans
The higher down payment required for conventional loans makes them less of an option for many 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.
Megastar Financial Redding | 920 Hilltop Drive, Suite B Redding, CA 96002 | (530) 999-9000