Conventional Loans

Conventional Loans

A conventional mortgage or loan is available through or guaranteed by a private lender or the two government-sponsored enterprises—Fannie Mae and Freddie Mac, and generally have a fixed-rate. 

With a "fixed-rate" mortgage the principal and interest rate that won't change for the life of your home loan, so only things like your home insurance or taxes would cause the monthly payment to change. The alternative, "adjustable-rate" mortgages, or an (ARM) loan, features lower monthly principal and interest payments during the first few years.

"Conventional" (conforming) mortgages terms range from 10 to 30 years. The longer the term of the loan, generally the payments will be lower because the loan is spread out longer, such as with a 30-year loan, and since the interest payments are also spread out further, you'll pay more interest over the term or life of the loan than with a shorter-term mortgage, such as 15- and 20-year fixed-rate mortgages.

With a shorter loan term and generally lower interest rates, you can pay off your home faster and build equity more quickly. However, your monthly payments will be higher than with a 30-year loan.

Conventional mortgage loans may offer a higher interest rate than other government backed loans, such as FHA or VA. 

Some Benefits of Conventional Mortgages are that these loans may require less documentation or other requirements compared to FHA or VA loans, which could speed up the overall process. While government-backed loans often have lower down payments, they usually come with extra fees. For example, FHA loans require you to pay mortgage insurance premiums (MIP). Conventional loans, on the other hand, don’t require mortgage insurance if you can put down at least 20%. This can save you a lot of money over time!

Conventional fixed-rate mortgages are available for refinancing your existing mortgage.

For a conforming mortgage, the loan amount is generally limited to $806,500 for a single-family home, although limits may be higher in regions where home prices are higher. 

Most conventional loans will require at least 5 percent as a down payment. If your down payment is less than 20 percent on a conventional loan, mortgage insurance may be required by the lender.

There are also some conventional loan options available for first-time home buyers for as little as 3% down. Down-payment assistance may also be available for first-time home buyers that qualify. 

We even have programs to customize your home loan!