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Conventional Loan vs FHA Loan: Which is better?

 

Buying a house is complicated for a first-time buyer, because there are so many papers and legal works required. One way to minimize the stress is to get a loan pre-approval that you can hang onto while you shop for the perfect house.

 

But which type of loan should you try to acquire? The first decision to make is whether to look for an FHA(Federal Housing Administration) mortgage loan or a conventional mortgage loan. There is no perfect choice for all home buyers – which one is right for you depend upon your specific circumstances.

 

A conventional loan and an FHA loan can both be great tools when you are in the market for a house. FHA loans can be a great source of savings for you as well as offering several other benefits. A conventional loan also has its advantages. The decision of whether to use an FHA loan or a conventional loan can sometimes be difficult. Here are a few benefits of Conventional Loan and FHA Loan.

 

Conventional Loan Benefits:

 

One of the biggest pluses of conventional loan is that they carry low interest rates, and because a federal agency is not involved, the approval process can be a little faster. Another big advantage of conventional loans is that they often do not come with the amount of stipulations that FHA loans do. For example, with FHA loans, if you refinance or sell your house, you will lose all of the money that you saved by going into it in the first place. Through prepayment penalties and other costs, it may actually cost you more. The rules and regulations are far less strict with conventional loans in many cases. In short, we can write the following major benefits of Conventional Loan:

 

✔     No Mortgage insurance requirement

✔     Can be used on all property types

✔     More loan program options

✔     Can hold numerous conventional loans

✔     Maximum loan limit

✔     3% Down payment

✔     No gift funds all allowed

✔     No upfront MIP

✔     Monthly MIP

✔     Lower monthly payment

✔     Less cash to close

Conclusion:

If you are a first time house buyer and don’t want to ruin yourself into paper works, you should probably pursue Conventional Loan. Such loans gives you more freedom, low interest rate, fast process and complete flexibility. Buyers who can afford a conventional loan enjoy more freedom and less paperwork  for Great deals on Conventional loans get in touch with us.

Build Your Home At Low Cost Construction Loan!

Financial constraints are large impediments in constructing a house for yourself often. But a construction loan comes helpful for easy construction of home. Construction loan was designed especially for providing financing in a hurdle no cost manner and for that reason many advantages are fastened in the home loan for the borrower.

One benefit of construction loan would be that the borrower compensates only interest during Construction period. He will pay primary amount following the construction is completely completed. The borrower takes certificate of occupancy and then only the construction is taken as completed. The interest on construction loan depends on the schedule of construction. Lenders shall ask for interest according to stages of structure. The loan amount depends on the equity in the land on which the true home is to be constructed. The loan amount may differ lender to lender. It all is determined by how a lot of the task cost a lender is prepared to offer as Construction loan.

 

Another indicate be mentioned is the fact that Construction loan is a brief term loan. As soon as you complete the construction and receive occupancy certificate you pay off the loan. It generally does not take much time to develop a genuine home nowadays. So Construction loan is given for 6 months to per annum usually. The borrower needs not to pay off construction loan in installments which might consume the much required money for timely construction of home. Whatever you do instead is the fact that you pay all the lent amounts at once when the home is finally completed. So the problem is where to find the money for paying of the principal amount as the loan has been used completely for construction goal. To solve this trouble there’s a provision of permanent financing which takes a new application from the debtor. Also there may be option of merging structure loan and everlasting funding to avoid second application which requires extra charge.

 

For bad credit people the benefit of construction loan is based on changing interest levels. Not actually you’ll be charged higher interest because of your bad credit. Since the interest rate on construction loan changes as per completion of different stages of the real home, the interest rate may even decrease at certain point of your energy and may remain still. Moreover you can find fixed rate bad credit construction loans option also which allows borrower to lock interest for certain repayment duration of say 15 or 30 years.

 

Search and compare extensively construction loan providers over internet. Before making the loan deal better compare terms and conditions. See which lender gets the right package for you. Also make a decision if you would like to a Construction loan till enough time of completion of home or you want to convert it into a home loan. For faster control and approval make an application for the loan online.

 

Magna Capital Group INC (MCG) is a Construction Loan Lender who understands the complexity and details of construction loans. We offer Construction Loan purpose of self-construction of a residential house property. This is a unique offering for customers who already have land owned by them and need funds for financing the construction of the residential house property on the land.

 

We are fast, creative and reliable consultants with the experience and lending sources to keep your project momentum moving forward. Magna Capital Group offers from standard convention loans to private hard money loans and can finance any type of residential or Commercial project. We will find the best programs to meet financial goals and specialize in innovative real estate financing for borrowers who fall outside the box of traditional lending guidelines.

How to Identify Fraudulent Hard Money Lending Practices

In Hard Money Lending industry, fraudulent lending practices commonly occur. If you are considering a hard money loan, here are a few things to consider about identifying fraudulent hard money lending practices.

Excessive Fees

One thing that you will definitely need to look out for is when a lender charges excessive fees. While there will be some fees associated with getting a loan, you should not have to pay excessively for these fees. In order to see if the fees that are being charged are excessive, you need to shop around with different lenders. Compare the different fees that are being charged by each. This should give you an idea as to what the market rate for certain fees are. If the lender that you are considering working with is charging significantly more than every other hard money lender in the market, you should most likely stay away from him or her.

Loan Points

The hard money lending industry is significantly different from the traditional loan industry. Therefore, you will notice many different things about how the loans are structured. Sometimes, hard money lenders will take a page from traditional lenders and charge loan points. However, if you can avoid borrowing from a lender that charges loan points, it would be for the best. Traditionally, loan points are required by lenders in order to buy down the interest rate and accommodate for questionable credit. However, the whole idea behind a hard money loan is that you do not need good credit in order to qualify. This means that you should look questionably at any hard money lender that is willing to charge you points to give you a loan.

Upfront Fees

In most cases, a legitimate hard money lender is going to allow you to pay most of the money that you owe him or her on the back end. This is why most hard money loans are set up as balloon loans with interest-only payments over the life of the loan. However, some hard money lenders will ask you to pay a large fee up front. Any time a lender asks you to pay a substantial fee on the front end of a loan, you should be very skeptical.

For Best Deals on Hard Money loans get in touch with us : Magna Capital Group Tel: (323) 655-6888