Conventional Loans: A Full Range of Home Financing Choice
When it comes to home financing, there is a world of possibility available to you. There are many types of mortgages with a broad spectrum of interest rates, down payments and terms. One of the most common types of home financing is a conventional loan. Also known as “conventional mortgage,” this type of loan is fully insured and funded through private insurance companies. They have more stringent approval requirements than some government-backed loans, but also have several benefits to consider.
Conventional Loan Basics
Conventional loans cover a wide range of home financing, but they all share a few characteristics in common. First, they are not backed through a government-backed agency. That is, they are not insured through the federal government. The alternative are non-conventional loans, which are insured through a branch of the federal government like the Federal Housing Administration.
To be approved for a conventional loan, you need to have good credit and produce proof of ability to pay your mortgage. Each loan is different depending on your down payment and financial history, so we can determine your eligibility with more certainty during a one-on-one consultation.
Conventional Loan Benefits
We can help you find the right conventional loans for you and your family’s unique needs. Benefits of conventional loans include:
- Great rates, both fixed and variable available
- Up to 30-year terms
- As low as 3% down payment
- Flexible approval requirements depending on your unique situation
- Fast approval so you can secure the home of your dreams
Conforming and Nonconforming Conventional Loans
There are two main divisions of conventional loans: conforming and nonconforming. Conforming loans are those that do not exceed $510,400 for single-family home. Nonconforming loans exceed $510,400.
This maximum limit is set forth through government-sponsored agencies Fannie Mae and Freddie Mac, which purchase mortgage loans in bulk. About half of conventional loans are conforming and fall within the limit set forth by Fannie Mae and Freddie Mac, while the other half are conforming, or “jumbo loans.” Jumbo loans are commonly variable rates and may have a higher down payment than a conforming loan. Todd E Speak – Sovereign Mortgage offers both conforming and nonconforming conventional loans.
Get Started Today
When it comes to purchasing a home, you need professional partners on your side. Whether you are just beginning to consider a conventional loan or are ready to compare rates, contact us.