There may be times when the loan you want is not offered by government lenders.
These types of loan called conventional loans are financing programs which are not financed by the Federal Housing Authority. Under this option, the risk is borne solely by the lender and so the interest rates may be higher.
While the higher interest rate may sound like a very unforgivable tradeoff, a conventional loan may offer you the variety you need. FHA loans are usually riddled with exceptions and exclusions from its coverage that deter the homeowner.
The variety of a conventional mortgage can also be seen in its applicability to most properties. Some FHA loans do not allow financing for certain types of properties such as condominium complexes or non-owner investment properties.
Also, a conventional loan does not require the mortgage insurance premiums which can cost hundreds of dollars under an FHA loan program. This is of course subject to putting down an initial down payment, usually pegged at 20%.
To be more specific, under an EZ “C”onventional loan program, the covered repairs may be up to 10% of the improved value or $15,000, whichever is less. Therefore, for a $20,000 repair costs for $150,000 home, the allowed repair amount limit would be $15,000 and not $20,000 as originally projected. Further, the borrower may not fund the overage under this loan type. It would also be helpful to note that the amount already includes the 10% contingency reserve and all other fees.
Depending on your target property and proposed improvements, an EZ “C”onventional loan may be the most apt loan option for you. PrimeLending offers various loan options, including conventional loans, jumbo loans and fixed rate mortgage loans. Contact us today and speak with one of our mortgage bankers for more information on how to avail these loans!