If you’re currently searching for a home in El Paso and are considering your options when it comes to home loans, we’d like to help you better understand your choices. We know it can feel overwhelming with the various items to consider and how they will affect you in the long term. Our role as a trusted home loan provider in El Paso is to match you with a loan that best matches your unique situation. One loan you’ll want to consider is a conventional loan. This type of loan comes with many incentives and can allow you to move through the buying process much quicker than other loan applications.
A conventional loan is not part of any of the government programs such as the Federal Housing Administration (FHA), Department of Veterans’ Affairs (VA), or the Department of Agriculture (USDA).
There are two primary types of conventional mortgages:
As your home loan lender in El Paso, we will help you understand which type makes more sense for you and your situation as well as how these requirements will affect you.
There’s an advantage to living in a city like El Paso where homes are generally affordable, compared to larger cities like Los Angeles or Seattle. As a potential homebuyer in El Paso, the loan limits of a conventional home loan are well within reach. As of 2018, the conventional loan limit is set at $453,100. This varies based on location, and the limit can be raised based on the home’s units. For example, a 4-unit home can have a limit of $871,450. Beyond that, for multi-unit homes in cities with a higher cost of living, loan limits are set even higher.
Home buyers who meet the basic qualifications are encouraged to seek a conventional home loan given that their monthly home mortgage can be low. Additionally, with these loans, you won’t have to worry about rising mortgage interest rates. As with any home loan, there are benefits and drawbacks. Consider these facts to help you better determine which route to go.
Benefits associated with conventional home loans:
Here are the primary drawbacks:
Harder to qualify. With more strict guidelines, qualifying for a conventional loan may not be feasible for everyone. That doesn’t mean you should lose hope. Remember, there are many more loan options to consider.
Required to pay closing costs. Unlike an FHA loan, there is no one to foot the bill when it comes to closing costs. This means that you are required to pay all closing costs, no matter how expensive.
If you have an excellent financial history, then a conventional loan is absolutely the way to go. Your credit history and ability to afford a large down payment indicates that you can garner benefits of being a homeowner early-on. Most importantly, this type of mortgage insurance premium puts you at an advantage compared to other home loans.
If you meet the general requirements of conventional home loans, there are many benefits you will reap from this loan. Connect with us today to learn more about getting started. We’re always happy to answer initial questions and guide you in the right direction. Even if this type of loan isn’t right for you, we do our best to find you one that is. Please give us a call today to learn more.