Cincinnati Real Estate Purchase

Although VanDyk Mortgage closes many FHA purchase loans each month there is still a high demand for conventional purchase loans.

If someone is looking to purchase a home and has the funds to put down a 20% down payment their best option is a Fannie Mae or Freddie Mac conventional mortgage loan.

With an 80% ltv (loan to value) there is no PMI (Private Mortgage Insurance). There is also a lender paid mortgage insurance option if a loan to value above 80% is needed. This is when the borrower takes a higher interest rate and in return the lender will pay the private mortgage insurance company the required premium in one lump sum.

The interest rates on conventional fixed rate loans also tend to be lower than on FHA loans. The types of loans that we provide can have fixed or adjustable interest rates.

Sometimes a borrower will choose a 3 or 5 year arm (adjustable rate mortgage) if they know that they will not be living in the property for a long time and will be selling the property before the rate begins to adjust. The rates are lower on adjustable rate mortgage loans than on conventional fixed mortgages.

There are also other financing options for borrowers who have strong credit but may not have the full 20% to put down. These options include doing a first mortgage with an ltv of 80% and a fixed rate second mortgage or HELOC (home equity line of credit) with an adjustable rate to make up the shortage in down payment.

In recent years the Fannie Mae and Freddie Mac conventional loans have raised their lending standards. These loan types are for borrowers with a solid credit score, good payment and employment history, and meet dti (debt to income) requirements.