Conventional Loan

What is a Conventional Loan?

A conventional loan is a type of loan that isn't backed by the government. There are two types of conventional loans: Conforming and Non-Conforming loans. Conforming loans have to meet the guidelines set by Fannie Mae and Freddie Mac. Any loan which doesn't meet these guidelines is a non-conforming loan.

To qualify for a conventional loan, you need a good credit score of at least 620. You can use this loan to buy your primary home, a second home, or an investment property. The amount of money you can borrow depends on where you live.

You can use conventional loans to buy a home or to refinance your existing mortgage. You can even use it to take out cash from your home's equity.

One benefit of a conventional loan is that you don't have to pay mortgage insurance if you make a down payment of at least 20% of the home's purchase price. But if you put down less than 20%, you will need to pay for mortgage insurance until you've paid off enough of the loan. The minimum down payment is 5% unless you are a first time homebuyer then it is 3%.

It's important to note that getting a conventional loan can be harder than getting a government-backed loan. You need a good credit score and a low debt-to-income ratio. You'll also need to have money for a down payment and closing costs.

When deciding on a mortgage, make sure to compare different loan offers from different lenders. You can work with a mortgage professional to help you understand your options and find the best loan for you. Remember, a mortgage is a big commitment, so make sure you understand the terms of the loan and can afford the payments before you sign on the dotted line.

Conventional loans are available for single-family homes, condos, and even mobile homes. If you're looking to buy a home in an area with high home prices, you may qualify for a High Balance loan, which allows you to borrow more than the county loan limit. You may also be able to get a Temporary Rate Buydown, which lowers your interest rate for the first few years of your loan.

Overall, conventional loans can be a good option for borrowers with a strong credit history who are looking to buy a home or refinance their mortgage. Just make sure to do your research and work with a trusted professional to find the best loan for your needs.

620+ FICO
Primary, second and investment properties
Loan amounts up to county loan limit
Eligible for primary, second and investment properties on purchase, rate/term and cash-out refinances
LTV's as high as 97% on purchase and rate/term refinances
LTV's as high as 80% on primary home and 75% on second home and investment cash-out refinances
Available on single- and multi-wide, co-ops*, condos and PUDs
High Balance available for loan amounts over the county loan limit
2-1 and 1-0 Temporary Rate Buydowns available for primary and second home purchases