SunWest Mortgages are either conventional or government-backed. A conventional loan is a mortgage which is not guaranteed by a government agency, and it is usually a fixed rate mortgage. Conventional loans are a safe bet and there are a variety of conventional loans to choose from, this will allow you to choose whichever one best suits your situation. This article will include several conventional loans you can choose from when taking out a mortgage.
Amortized Conventional Loans:
You can take out an amortized conventional loan from a bank, this loan refers to you paying it off periodically. If you make the payments according to the set schedule, then you will be able to pay the loan off completely by the end of the set term.
If the amortized conventional loan is a fixed rate loan, then each payment will be equal to a dollar. However, if the loan is an adjustable rate loan, then the payment can vary depending on how the interest rate changes, so it could be equal to a dollar or it could be higher or less.
Adjustable Conventional Loans:
This type of loan is as the name states, adjustable. Its initial rate of interest is low if you compare it to a fixed rate loan, and it could be a great option for anyone who’s income may increase as you will be able to pay of the initial payments quite easily. Furthermore, adjustable conventional loans have a certain limit to the amount of times they can be changed throughout their lifespan.Additionally, you should remember that if you take out an adjustable conventional loan the adjustment periods could be; every 6 months, every year, or other period of time, this would be made clear to you when you take the loan out.
It is more difficult to qualify for a conventional loan than it is to qualify for a FHA loan. This is because the bank which is going to potentially give you the loan is basing their decision on your personal credit and you as a person, so they can decide whether or not you will be able to pay the loan back. For this reason, to take out a conventional loan, you will need to make sure you have a lot of money in your savings to make the necessary down payment to get the house. However, the benefit of a conventional loan is that it doesn’t have as much requirements that need to be met as an FHA loan.
People who have a low credit score will have to deal with higher interest rates when it comes to taking out a conventional loan. On the other hand, conventional loans offer a bit more flexibility as lenders would be more likely to negotiate about the terms of the loan as opposed to a government-backed loan which has to follow the standard guidelines which are put in place. Additionally, a conventional loan may be processed a lot faster than a government-backed loan.