What is a Conventional Loan?
Conventional loans are mortgage loans offered by non-government sponsored lenders. A conventional, or conforming mortgages adhere to the guidelines set-forth by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate. While many think that a 20% down payment is required on conventional loans, there are Conventional Loan programs with as little as 1% down-payment option. To see if you qualify for the 1% Down Conventional Loan Program, Click Here!
What is the Difference between Conforming & Non-Conforming Loans?
Conventional loans are split into two types: Conforming and Non-Conforming.
Conforming loans are mortgages which meet the requirements to be sold to Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), USDA or Dept. of Veterans Affairs (VA).
Non-Conforming loans, are just just the opposite. These mortgages are not bought by Fannie Mae, Freddie Mac, FHA, USDA, or VA.
What are the Benefits of a Conventional Loan?
Conventional Loans generally yield a more favorable Interest Rate and Flexibility, since the typical borrower tends to have better income and credit ratios, plus more liquid-assets for the down-payment thus keeping their Loan-to-Value at or below 80%. Questioning if you qualify for a Conventional Loan… Click Here to find out!
Is there a Limit on the amount that can be borrowed when applying for a Conventional Loans?
Yes there are limits on how much can be borrowed. The Federal Housing Finance Agency (FHFA) publishes annual conforming loan limits that apply to all conventional mortgages on 1-to-4 unit properties delivered to Fannie-Mae and Freddie-Mac, including general loan limits and the high-cost area loan limits. General as well as High-cost area loan limits vary county by county.