VANDYK MORTGAGE FORT MYERS
30 YEAR CONVENTIONAL MORTGAGE
30 Year Conventional Loan
Best for:
Buyers with a good credit score and money for a down payment.
What it is:
When it comes to loan programs, the traditional 30-year fixed-rate conventional mortgage is one of the most popular. With a constant interest rate and monthly mortgage payments, it is a great option for those looking for consistency in their payment program. For prior homeowners, the down payment can be as low as 5%, and for first-time home buyers it can reach as low as 3%.
Keep in mind that if the down payment is less than 20%, Private Mortgage Insurance (PMI) will be required, but will drop off once your loan reaches 80% loan-to-value (LTV).
Qualifications:
Unlike government loans, conventional loan programs place more importance on the borrower’s financial qualifications. Meaning, that when you apply for a conventional loan, you will get a better rate if you have better qualification factors. These factors can include: higher credit score, significant liquid assets in your bank account, and low debt-to-income ratio.
30-Year Fixed Loan Pros and Cons
Pros:
Low Monthly payments
3% and 5% Down Payments Available
PMI will cancel once 20% equity is reached
Cons:
Heavily dependent on credit score and income.
Potentially higher interest rate, in contrast to other loan programs.