Most people need a loan in order to buy a new house. There are several types of loans available to finance your purchase. FHA is a loan that is guaranteed by the government. This type of loan requires a lower down payment than a conventional loan. Conventional loans often require at least 5 percent of the purchase price as a down payment. There are many financial institutions that offer conventional loans. Determine which kind of financing would be best for your situation before shopping for your new home. There are benefits to obtaining a conventional loan such as lower closing costs and rates. Lenders set their own rates and if you have good credit, you could receive a lower rate than if you financed with FHA. A conventional loan often has stricter lending requirements than a FHA loan. Compare both types of loans to your financial situation to decide which loan is best for you. Conventional loans appeal to many potential buyers because they can approve your loan before you shop for your new house. This can give you greater negotiating power with the seller. You can also find lenders that offer conventional loans that will finance a portion of the closing costs into the loan. This can help control the amount of cash you must part with before you buy a new home. Keep in mind that you will pay a higher interest rate for this convenience. Conventional loans are found in credit unions, banks and savings and loan companies. You will also find these types of loans in private mortgage companies. It is important that you research all of your financing options before shopping for your new home. If you pay a high interest rate for financing your home, this can result in you paying thousands of dollars in interest payments. It is exciting to shop for a new home, but if you take the time to secure your financing options, you can save money. Buying a new home is similar to buying a new car. You want to make your financial decisions based on sensible financing options and not because you must have this new home.