The short and sweet answer to this question is it depends. There are a variety of fixed rate home loan solutions. It is up to you as the buyer to define your goals. So, if you are looking to lower your monthly payments or switch another loan term, a conventional mortgage loan may be right for you.
Let’s dive into everything about conventional loans and refinancing to help you decide if this is the right move.
What is a Conventional Fixed Loan?
A conventional fixed loan offers security of a fixed rate for your purchase, whether you are a first-time homebuyer or just looking to refinance.
This type of loan is unique for many reasons. One of those reasons is because throughout the life of the loan, the borrower’s note rate will not change. Homeowners will have a consistent principal and interest payment throughout the loan term.
Why Should You Go with a Conventional Fixed Loan?
Eventually, we all want to find our “forever home” but that may not be the case with every home you look at buying. If you haven’t found the dream home, but one that makes sense for now and in the near future, a fixed loan rate could be the best option for you. We always recommend looking at your future needs to see which type of mortgage will be best for you and your future plans.
Weigh Your Options
You need to ask yourself if refinancing makes financial sense. If current rates are higher than your existing rate, refinancing a conventional loan may not be worth it at the time due to costs.You can use our loan calculator to see what your estimated monthly payments would be – just don’t forget about other fees and costs.
Another thing to keep in mind is that sometimes refinancing can cost thousands of dollars.
Finally, when weighing your options, you need to be sure you can provide all of the correct documentation for refinancing. The refinancing process is similar to buying your first home, so it is important to have the correct documents in place. If for some reason you can’t provide all of the documentation, an FHA streamline may provide a similar path to refinance.
What You Get With This Loan
Here is a list of the options that come with a conventional fixed loan:
- Conventional, conforming 30, 20, 15, and 10 year fixed rate mortgages.
- 30-year and 15-year fixed rate jumbo mortgage programs for loan amounts exceeding areas’ conforming loan limits.
- 30-year and 15-year FHA mortgages; popular low money down financing programs.
- 30-year fixed rate USDA rural housing loans; solution for lower income borrowers looking to purchase or refinance homes in rural communities.
- 30-year and 15 -year VA loans; option for eligible active duty military personnel and veterans.
What This Means
Whether you are a first-time home buyer looking to capitalize on a low down payment program such as an FHA, USDA mortgage, or a real estate investor pursuing a long term conventional fixed rate financing strategy, we’re here to help. If you would like to speak with one of our mortgage consultants about our various fixed rate financing solutions contact us at (573) 875-1100 today.
