Conventional Loans

What are Conventional Loans?

conventional loansConventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by Fannie Mae or Freddie Mac. Typically, conventional loans have better rates, terms and/or lower fees than other types of loans. However, conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 5-20% and reliable monthly income. Conventional loans are ideal for borrowers with good credit and at least a 5% down payment.

Most Common Types of Conventional Loans

Fixed Rate Mortgages: Your rate and payment never change.

  • 30 Year Fixed Loan
    Benefits: Lowest fixed monthly payments.
  • 15 Year Fixed Loan
    Benefits: Lower rate than the 30 Year Fixed Loans; Pay less interest and pay your home off more quickly.
  • 10 Year Fixed Loan
    Benefits: Lower rate; Pay off your loan and build equity faster.

Adjustable Rate Mortgages: After the initial period your interest rate can change once a year, for example;

  • 3/1 ARM
    Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years

What are the Conventional Down Payment Requirements?

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 another type of loan.

What types of property are eligible?

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.

Find Out if a Conventional Loan is Right for You

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(214) 403-0019


Email
sean@vipmtg.com


Address
92 Piazza Lane Suite 100
Colleyville, TX 76034

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Seán Máhon-Gunnell
NMLS # 1814360

VIP Mortgage Inc. (sponsor)
NMLS# 266210

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