You have two broad options when you want a mortgage: a government-insured loan like an FHA loan or VA loan , or a conventional loan. Conventional mortgages are not backed by the government, but rather insured by private companies.
As conventional mortgages in Old Lyme, CT are not backed by the government, they are viewed as a higher risk and thus have higher standards you must meet to be approved. Conventional mortgage lenders have higher income and credit guidelines, but they offer a range of advantages to borrowers.
Conventional home loans in Old Lyme, CT are usually the best choice if you have excellent credit and can put down at least 20% on your loan. Conventional mortgages are very flexible, as they can be used to buy not only a primary residence, but also an investment property or a vacation home. This is unlike VA loans and FA loans which can only be used to buy your primary residence. Conventional home loans can have a term of anywhere from one to forty years, and either a fixed or adjustable interest rate.
There are many important benefits to choosing a conventional loan in Old Lyme, CT over a government-backed loan including:
Conventional loans have stricter requirements than government insured loans. General guidelines for getting approved include:
If you qualify for a conventional mortgage in Old Lyme, CT, it is most likely a better option for you than an FHA mortgage. FHA loans, unfortunately, have become more costly over the last few years due to increasing insurance premiums.
When you are deciding between a conventional and government insured mortgage such as FHA or VA, think about what is most important to you. If you have excellent credit and the ability to put down 20%, a Old Lyme, CT conventional mortgage will save you more in the long run. If you want to pay less up front and get a higher monthly mortgage payment, you may prefer a government-backed mortgage.