Conventional Conforming loans are mortgages which are not insured by the government (like FHA, VA, USDA Loans), and which meet the lending guidelines set by Fannie Mae or Freddie Mac. Conventional loans are typically less costly overall than other loan types. Conventional loans require borrowers to have good-to-excellent credit and reasonable amount of monthly debt obligations relative to income. Conventional loans are ideal for borrowers with good credit and at least a 5% down payment on single family homes (3% down option is available to first time buyers, please contact us for details). Multi-family and/or investment properties require a higher down payment.
Fixed Rate Mortgages: Your rate and payment never change.
Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.
For Purchase transactions Conventional Loans require the home-buyer to put down at least 5% - 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property. If you don't have enough equity to qualify for a conventional refinance - even if you owe more than your home is worth - you might be eligible for a HARP 2.0 Loan.
Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.
Contact us to discuss your situation specifics and let us help you determine which loan type best serves your needs.