Conventional versus Government Mortgages
Another consideration in finding the right mortgage for your Connecticut home is a conventional loan versus a government loan. This distinction regarding mortgages refers to the insurance or guaranty of your loan.
Conventional loans are not insured or guaranteed by the federal government; they most likely have no insurance or are traditionally insured by private mortgage insurance companies. Conventional Loans are probably the most popular loan of all loans and are used to purchase or refinance single family houses, in Connecticut and all other states. Minimum down payments are generally 5% and loans with 20% down payments don’t require the additional expense for mortgage insurance. They usually adhere to Fannie Mae/Freddie Mac approval guidelines.
Government loans are insured by departments within the US government like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Government Loans offers lower down payment options for homebuyers with competitive mortgage rates.
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