There have little options for a debtor if he/she looking to purchase an asset with low down payment. One of the best options for low down payment is FHA which is a government backed loan and it is also a great choice for debtors from past many years. It has only 3.5 percent down payment. But nowadays one more option is available for the debtors who are looking for a low down payment option, which is the conventional loan. Conventional loans are not backed by the government, still, they have the very low down payment and also have many flexible options. In fact, a conventional loan has only 3% down payment.
Major Advantages With Conventional Loans
For conventional loans, a buyer only needs to make a down payment of 3%. The best flexible thing with a conventional loan is that, in some conventional loans, mortgage insurance is lower than any other loan program and also in some cases it can be removed after a few years. But a conventional loan needs a higher credit score. It needs a reliable credit score which is 620. It is true that to get approve for a conventional loan is harder but the costs are usually low and on the other side the mortgage insurance can be removed. For an example, if you approved for a conventional loan for three years and the amount of the loan becomes less than 80% of the value of the home, many conventional loans offer an option to remove the insurance. On the other hand, the cost of the insurance on a conventional loan is very low. The normal range of the cost is around .5 to 1 percent of the full loan fund.
There are many options for a buyer but the FHA is the first option for them. On the other side, conventional loans come with a huge range of variety and flexibility. So, talk to your lender clearly and take a wise decision from your side. In Miner Capital Funding, we offer the best and reliable advises to our customers. Also, we offer less paperwork as well as fast approval on many loan programs such as conventional loans, Hard money loans, and much more.