Traditionally, a conventional home loan differs from an FHA home loan or VA home loan because of the lack of government backing that bolsters the loaning process. While it is true that a vast majority of conventional home loans are honored through private lenders and free-enterprise loaning companies, it is important to note that some conventional loans still have the added security of being supported by the two major loan enterprises that are indeed sponsored by the US government: Freddie Mac & Fannie Mae. Delving further into a comparison of running counterparts to VA or FHA home loans, a conventional loan does pose some substantial benefits worth exploring. That’s not to say that a conventional loan is superior to an FHA home loan or VA home loan. In fact, there are some inherent disadvantages associated with conventional lending versus a loan acquired through VA loans or FHA loans that warrant mention and invite additional scrutiny.
By and large, a conventional home loan is most applicable to homebuyers that enjoy a favorable credit rating (630+), positive debt-to-income ratios (less than 43%), and a down payment of at least 3% of the home’s purchase price. Granted, many of these loan parameters are subject to change and can vary from lender-to-lender and homebuyer-to-homebuyer in many instances. However, they are still representative of the loan requirements set forth by the two aforementioned government-backed entities (Fannie Mae & Freddie Mac) that contribute to the conventional home loan industry. How this is preferable to an FHA or VA home loan can differ depending on the amount being loaned and lending/payment history of the loan’s recipient but suffice to say that many conventional loans can save money on a monthly mortgage payment and can often forgo the need of private mortgage insurance (PMI). Additionally, most conventional loans have the added bonus of not being restricted solely to either a fixed-rate mortgage or an adjustable-rate mortgage; thus enabling more flexibility, home loan options, and monthly financial commitments being adhered to by homebuyers & homeowners alike.
Benefits Of Conventional Home Loans
While there are several similarities between conventional home loans aimed at refinancing a property and those that are offered through other means, the most tangible difference is apparent when one considers the “backing” or endorsement of each of the home loans, respectively. For example, a conventional home loan that is obtained for home refinancing does not have the safeguard of governmental support as those obtained through the FHA, VA, or USDA. Initially, that may seem worrisome to many would-be borrowers seeking to refinance their home through conventional home loan refinancing methods, however, it does afford certain benefits that are not immediately obvious; such as reduced down payment requirements, lower interest rates, and reduced home loan terms.
98% OF OUR CUSTOMERS RECOMMEND US
We shopped around for the lowest rate to refinance our current mortgage and no one could beat them.Our experience from beginning to end was outstanding!
I have never experienced a loan process that went so smoothly (this is my fourth). The team were amazing! They gave me the lowest rate among three lenders that I spoke with, they were always available and very friendly and I had communication with them throughout the entire process, they always kept me up-to-date with the file and everything went very smooth, even with some credit issues I have. And the loan was completed before we were scheduled to close so we were able to close early. I have a friend who used another lender at the same time and she went through so many hassles and had to extend their closing. Next time she’ll use them also have a much better experience. Thank you!
From top to bottom our refinance with them was flawless. They was able to provide the best rate of anyone else we checked with, we were able to skip 2 mortgage payments, lower our monthly payment by almost 10%, and even walked out of closing with cash. We would highly recommend them to anyone looking for a new home loan or a refinance.
They work hard to get you the best interest rate and they have really low fees. That's first. But they also are great to work with, friendly and professional, and gets back to you in a timely fashion. I've purchased many properties and two now with them. I would recommend them to anyone and everyone.
They were perfect to work with every step of the way. They helped me find the right loan product for my situation and kept me informed with each and every step of the process. They made sure everything was in place and there were never any surprises, I loved the communication - they are definitely on top of it. They helped make this a painless process and my loan closed in a very timely manner. I would recommend them for any of your loan needs and I know they will find the best solutions for your situation.
Their team are THE BEST!! They went out of their way to make sure I was always taken care of. They gave me the lowest interest rate of any lender I met with and after my loan was already approved they found me a BETTER rate. They just kept looking even after the deal was done and they had no reason to, they lowered my rate and surprised me with a lower payment. Who does that?!? And their team was so friendly and professional they just made the whole process great. I will tell everyone I know to use their team every chance I get- Thank you!!!
They are a great team of loan officers who helped me buy a new house last summer. Their team was always quick to answer my questions and was very knowledgeable. I would highly recommend them to anyone looking for a new team of loan officers. Their friendly and outgoing personality make them a delight to work with.
I've had the pleasure of working with them twice for a new loan origination and a refinance. Both instances they completely exceeded my expectations. On our original loan, we were looking for our first home while my wife was pregnant with our first child. It is generally an extremely challenging time to look for a home and go through your first loan process, but they made the experience pleasant and easy as they are exceptional on their knowledge and follow-up. When we were ready to do a refinance we went through them again and it was a very easy low stress process that ended up saving us a lot of money. I am very happy to recommend them in the highest regard, they are exceptional at what they do and are a pleasure to work with. Thanks!
They helped my husband and I purchase our first new home. They were fantastic, with lightning quick responses and willingness to work around our schedule. In addition, they made the process super easy, from pre-qualification to closing. We would recommend their team to anyone looking to purchase a new home!
Our team of mortgage professionals are licensed in multiple states to give you the best rates and mortgage experience possible.