VA Loans
What Are the Advantages of a Conventional Loan?
If you're a current or former U.S. service member, or the spouse of one, a U.S. Department of Veterans Affairs (VA) loan could be just what you need. There's no right mortgage loan for everyone, so it's important to know both the benefits and drawbacks of each of your options before you choose. Here are some of the benefits you'll get from a conventional loan:
Low costs: A high credit score can help you qualify for a low interest rate. Plus, you can request to have the insurance requirement removed once your loan-to-value ratio reaches 80%. In contrast, the mortgage insurance premium that comes with an FHA loan may remain for the life of the loan, and the same goes for the guarantee fee on a USDA loan.
Higher loan limits: While conforming loans do have limits, you can go even higher with jumbo conventional loans if you need to. You may not get that kind of flexibility with government-insured loans.
Flexibility for some: Private mortgage lenders have more flexibility with conventional loans than they do with government-insured loans, primarily because they don't need to follow the guidelines set by those government agencies.
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Conventional Mortgages
Conventional mortgages are home loans not insured by the government, typically requiring a higher credit score and a larger down payment, but offering competitive interest rates and flexible terms for qualified borrowers.
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FHA Mortgages
FHA mortgages are government-backed loans insured by the Federal Housing Administration, designed to help low-to-moderate income borrowers with lower credit scores and smaller down payments secure home financing.
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VA Mortgage
VA mortgages are home loans guaranteed by the U.S. Department of Veterans Affairs, offering eligible veterans and active-duty service members benefits such as no down payment, no private mortgage insurance, and competitive interest rates.
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USDA Mortgage
USDA mortgages are zero-down-payment loans for eligible rural and suburban homebuyers, backed by the U.S. Department of Agriculture, with competitive interest rates and flexible credit requirements.
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Non-QM Mortgage
Non-QM (Non-Qualified Mortgage) loans, including the Debt-Service Ratio (DSR) program and Bank Statement program, provide flexible financing options for self-employed borrowers and those with non-traditional income, focusing on cash flow and alternative documentation rather than traditional income verification.
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Jumbo Mortgage
Jumbo mortgages are loans exceeding the conforming loan limits set by the Federal Housing Finance Agency, designed for financing luxury properties and high-value homes, typically requiring higher credit scores, larger down payments, and offering competitive rates for financially secure borrowers.