Unlike other loans, like those from the Department of Veterans Affairs (VA) or the Federal Housing Administration (FHA), a conventional mortgage is not guaranteed. Instead, private lenders provide this type of mortgage, and the rules set by government-sponsored enterprises apply to it.
Here at Harbor Mortgage Company, we can help you understand your loan options and the varying factors that come into play when applying for a conventional mortgage, such as:
- Rate of Interest: One important variable that often shifts according to market conditions, borrower creditworthiness, and economic variables is the interest rate. Good credit makes borrowers seem less risky, which may translate into a lower interest rate.
- Loan Amount: The loan amount, or amount borrowed, might change based on your credit score, the cost of the house, and the amount of the down payment. Maximum loan limitations set by lenders may depend on variables like property type and region.
- Duration of Loan: A range of loan terms are commonly available with conventional mortgages. The monthly mortgage payment and the total amount of interest paid over the loan’s life can be affected by the loan term selection.
- Requirement for Down Payment: The down payment is your first advance payment. A down payment is frequently necessary for a conventional mortgage, and the amount can vary. It’s important to know that a larger down payment could lead to lower interest rates as well as a lower loan-to-value ratio.
- Closing Expenses: Closing costs associated with a conventional mortgage might include fees for title insurance, appraisals, inspections, and other services. The lender, the transaction’s complexity, and the location can all affect the precise closing expenses.
These are only a few of the factors that might affect a conventional mortgage loan. Contact our team to learn more.