In today’s video, Brian Cushing of the Cushing Team at Guild Mortgage here in Reno spends about 90 seconds breaking down conventional financing. Click to learn the basics of conventional loans, or check out the transcript below.
Conventional Loan Basics
“Today we’re talking about conventional financing. What does that mean? Conventional loans are the most common of all mortgage loans. If you’re looking to buy a kind of residence, like a house or a multi-unit property, that would be financed in conventional terms. Conventional financing will allow you to buy a first home, a second home such as a vacation home, and even rental properties or investment properties from one to four units may qualify.
Conventional financing is based on risk calculations and your financing of a home. So if you have a higher credit score, you’re going to be a lower risk. Lower credit score? You’re a higher risk, so you’re going to pay more on your mortgage rates.
First-time homebuyers can put as little as 3% down. Even a second homebuyer can buy with 5 to 10% down. And there are several down payment assistance programs that can be used for all or a portion of the 3% down payment as well as for closing costs.
Unless you’re a veteran or a disabled veteran, a conventional loan is probably the best bet for you. You want to buy a vacation home? As little as 10% down payment can get you into the home of your dreams up at the lake or wherever you spend your spare time.
For investors, you can put as little as 15% down but usually 20 to 25% percent down really helps you get the best cash flow out of your investment property. Conventional loans allow you to put as little as 3 percent down as a first-time homebuyer and you can finance up to 10 properties, so you might start with your first home and end up as a multi-millionaire investor.”
Questions about conventional loans, or any of the other loan programs offered at Guild? Contact the Cushing Team in Reno today, and let’s talk. And check out these posts for more information about the differences between conventional and FHA loans and how to decide if a conventional loan is right for you.