Which Is Best for Woodland Hills Home Buyers? A Conventional loan or FHA
Buying a home in Woodland Hills can be challenging, especially if you aren’t already pre-approved for a mortgage. That’s why we recommend you reach out to us, your local Woodland Hills mortgage broker, as soon as you start thinking that you may want to buy soon. Not only will you get a head start on the competition, but you’ll also know which loan option works best for you.
In this post, we’ll explore two of the –FHA and conventional.
About Conventional Loans
One common loan for purchasing real estate in Woodland Hills is a conventional loan. A conventional loan is not government-backed, but it still follows the guidelines Fannie Mae and Freddie Mac set. When people think of a home loan, they often think of a conventional loan.
About FHA loans
On the other hand, FHA loans are government-backed, which means they are insured by the Federal Housing Administration (FHA).
These loans are designed for people who may struggle with coming up with a large down payment or have lower credit scores.
Nuline Funding is proud to offer both types of loans to Woodland Hills homebuyers.
Advantages of a conventional loan
Down payment flexibility
If you can put down 20% for your conventional loan, you’ll avoid paying for private mortgage insurance. However, you can still qualify for a 3% down payment conventional loan! The difference is that you will need to pay for mortgage insurance until you’ve reached 20% on your home equity.
Payment term options
With some conventional loans, you can choose 15, 20, 25 to 30-year payment terms. While shorter terms mean higher monthly payments, it’ll also mean saving thousands of dollars over the life of the loan. If higher monthly payments aren’t doable, opt for a 30-year term.
More housing choices
An advantage of a conventional loan in Woodland Hills is the wider variety of property types you can finance. You can buy a single-family home, condo, multi-family complex, or investment property.
Homebuyers appreciate the fixed rate that conventional mortgages offer, which gives more security with a locked rate for the life of the loan. This means your payments will never change even if mortgage interest rates go up or housing prices fall.
When does getting an FHA loan make sense?
If a buyer has a below-average credit score or little to no down payment, an FHA loan makes more sense. The qualifying factors are more lenient, and down payment requirements are also laxer. You should be aware that insurance payment is built into this loan. This insurance payment will eventually stop in a conventional mortgage, while it will remain for the life of the loan with an FHA.
If you need advice on which loan type is right for you, contact Nuline Funding of Woodland Hills, CA.
There is no one size fits all loan product, and knowing which loan product is best for you boils down to understanding your particular financial situation. Give us a call or send us a message for a free consultation today!
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.