Which Type Of Mortgage Is Best For You
Which Type Of Mortgage Is Best For You
If you want to buy a home using credit, you must choose between the different types of mortgages. By reading below you will understand which type of mortgage is best for you. Contact a licensed Long Island Mortgage broker to better educate you is always advised. There are many types of mortgage loans, including:
- Conventional loans
- Conforming loans
- Non-conforming loans
- Fixed-rate loans
A conventional loan is one of the mortgages you may come across when looking for a suitable mortgage. It’s a non-governmental program. The terms of the conventional loan you get depend on your financial situation. Furthermore, it doesn’t have specified rules and standards for getting a loan.
Conventional loans do not follow the rules and regulations, unlike conforming loans which have to abide by specific standards.
Conforming loans are sponsored by the government and have set rules which the government makes. For instance, Fannie Mae and Freddie Mac provide conforming loans. In addition to that, there are requirements needed when trying to get these types of loans. They include;
- A credit score of 620 or higher for a fixed-rate mortgage.
- A down payment of at least 5 percent
Conforming loans provide better services than non-conforming loans because they are less prone to risks.
Non-conforming loans that don’t abide by any standards made by conforming loans. An example of a non-conforming loan which requires higher credit scores, and its standards are higher than those of conventional and conforming.
If your financial situation doesn’t meet the standards, you can opt for a non-conventional mortgage.
Get Professional Help
Selecting the appropriate loan to fit your needs can be a daunting and confusing activity. You can consult with experienced mortgage loan advisors to discuss your options and help you pick the right loan for your budget.