If you are in the market for a home mortgage, you will likely be considering your loan options as you put a down payment on a home you want to buy. Several different types of loans are available for qualified home buyers. Learn the differences between an FHA loan and a conventional loan below.
FHA Loan
If you apply for an FHA loan in Monroe, LA, there are some things you need to know about this type of loan. First, this type of loan is different than a conventional loan because it is backed by the Federal Housing Administration (FHA) and is only offered by lenders approved by the FHA, including Century Next Bank. These types of loans usually have lower requirements for a down payment, though you will have to pay mortgage insurance premiums for as long as you have a loan balance.
Conventional Loan
A conventional loan is a typical loan obtained from a bank or other lending service. This type of loan is not insured by a federal agency. These loans are not as easy to qualify for because they have a higher down payment requirement and stricter lending standards to adhere to. However, you usually only have to obtain private mortgage insurance if you put down less than 20% of the house’s total price. If this occurs, you can often have that insurance canceled when you have reached 20% equity stake in your home.
Therefore, you need to consider what type of loan you wish to apply for depending on your financial situation and credit history. Consider the features and advantages of each before deciding upon which one to apply for. Century Next Bank provides FHA loans to qualified buyers near Monroe, LA, and surrounding areas.
Century Next Bank, Member FDIC and Equal Housing Lender
