Confronting the unbelievable inflation in recent years, more and more people realize buying a property is a useful way to win this combat. But when the customers intend to purchase houses with the loans, they need to know what type of loan they fit. Technically, there are many loan choices for the home purchasers, and most customers can find the favorable one to fit their unique situation. So, what kind of loan type is the most common one on the nowadays market? Let’s review a survey issued by Fannie Mae, one of the United States government-sponsored enterprises.
Note: Government loans include FHA loans, VA loans, and other non-conventional loans from Marketrac.
Their customers invited to participate in the Mortgage Lender Sentiment Survey represent a broad base of different lending institutions that conducted business with Fannie Mae in 2020. Institutions were divided into three groups based on their 2020 total industry loan volume – Larger (top 15%), Mid-sized (top 16%-35%), and Smaller (bottom 65%). The data below further describe the composition and loan characteristics of the three groups of institutions.
The three groups all show that the conventional (confirming) loan takes the most percentage among the major loan types, the larger group 68%, Mid-size 75%, and Smaller 79%. Surely, conventional loans do have many advantages:
Low-interest rates
Fast loan processing
Diverse down payment options
Low private mortgage insurance (PMI)
No PMI is required if the down payment is 20% or more
As can be seen, the conventional loan type is the most common and preferred by customers in modern times.
However, the home mortgage is already a very mature industry in the United States, and many new programs are being created to meet the demands of the different clients, so it is necessary to consult a professional loan officer. Delight Funding has an expert loan team to help you find the best loan program according to your specific background.
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