Conventional Mortgage

Mortgage Rates are Still at All Time Low!

A conventional loan is a mortgage that is offered by lenders, such as banks, credit unions, and mortgage companies. Conventional loans have been a popular choice for homebuyers for many years and are a great option for those who have good credit and a stable income.

Advantages of Conventional Loans

• Lower Costs: Conventional loans often have lower upfront costs, including lower closing costs, compared to government-backed loans.
• Flexible Terms: Conventional loans offer a wide range of terms and options, from 15 to 30-year fixed-rate mortgages, to adjustable-rate mortgages (ARMs). This allows borrowers to choose the loan that best fits their financial situation.
• Larger Loan Amounts: Conventional loans typically have higher loan limits, meaning you may be able to borrow more money to purchase a home.
• No Mortgage Insurance: Conventional loans usually do not require mortgage insurance if the loan-to-value (LTV) ratio is less than 80%.

Disadvantages of Conventional Loans

• Higher Down Payment Requirements: Conventional mortgage loans typically require a down payment of at least 5% of the purchase price, although if you are a first time home buyer you could qualify for as little as 3% down payment.
• Stricter Qualification Criteria: Conventional mortgage loans have stricter credit and income requirements, making it more difficult for some borrowers to qualify.
• Higher Interest Rates:  Conventional mortgage loans often have higher interest rates compared to FHA loans, particularly for those with lower credit scores or lower down payments, however your Mortgage Insurance rate can be much lower than FHA Loans.

How it Works

• Monthly payments based on mortgage interest rates, principal loan amount, and amortized interest over 30 year fixed mortgage or 15 year fixed mortgage terms
• Your mortgage payment will not change throughout the life of the loan
• Your actual payment will vary based on your situation and the current interest rates when you apply
• Pay your mortgage off at any time without any pre-payment penalties

To qualify for a conventional loan, you must have a good credit score, a stable income, and enough money for a down payment. Lenders will also look at your debt-to-income (DTI) ratio, which measures how much of your income is going towards debt repayment, to determine if you can afford the loan.  If you're thinking about applying for a conventional loan, it's important to start by getting your credit score in order. Pay down high credit card balances and make sure to pay all bills on time. You should consider working with a mortgage professional to determine the best loan options for your situation.

I am here to make your home loan process easier, with tools and knowledge that will help guide you along the way.  I'll help you clearly see differences between loan programs, allowing you to choose the right one for you whether you’re a first-time home buyer or a repeat buyer.

Got questions?  Give me a call!  

As your mortgage specialists I would be happy to answer any and all of your questions.