Conventional Loan | What is it?
A conventional loan is a type of mortgage loan that is not offered or secured by the federal government, as opposed to government-insured loans such as Federal Housing Administration (FHA), U.S. Department of Veteran Affairs (VA) and U.S. Department of Agriculture (USDA).
Conventional conforming 30-year fixed loans are most common and have tougher credit score requirements than government backed loans. For 30 year mortgage rates click here. Conforming conventional loans generally require a 620 credit score to qualify, which is higher than most government-backed loan requirements.
More money down. Most conventional loan programs want 3% down or less if you’re a first-time homebuyer, but typically, it’s 5%. In contrast, An FHA loan needs 3.5% down while the USDA loan and VA loan have no down payment requirement.
Here are a few of the most common conventional loans and how they work. Conforming conventional loans are loans that follow the guidelines set by Fannie Mae and Freddie Mac, including maximum loan amounts.
Jumbo loans allow you to borrow more than the maximum lending limit for conforming loans. However, they typically require a higher credit score, lower debt-to-income ratio and larger down payment. Interest rates mortgage today.
Portfolio loans can be a conventional loan that a lender keeps in its own portfolio rather than selling it on the secondary market. This option allows lenders to be more flexible than the standard Fannie Mae and Freddie Mac guidelines.
Conventional Loan Programs
Adjustable Rate Mortgage
An adjustable rate mortgage has variable interest rates that can change periodically after the initial fixed-rate period.
For today’s interest rates or help calculating home loans, trust the best Colorado and Florida mortgage broker, Par 4 Mortgage.
Fixed Rate Mortgage
With a fixed rate mortgage, the interest rate is set for 10, 15, 20, 25, or 30-year terms, and payments remain the same for the entire mortgage term, even if rates fluctuate.
For the current rate on mortgages or a mortgage loan calc, click here.
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