Conventional Loans
Conventional Loans:
- Conventional loans are mortgage loans offered by non-government sponsored lenders. These loan types include:
- Fixed Rate Loans
- Balloon Mortgages and Pledge Asset Loans
- Jumbo / Construction Loans
- Reverse Mortgage
Fixed Rate Mortgages Advantages:
- You’ll know exactly how much your monthly payment will be
- Amazing option if you plan to stay in your home for years to come
- Budget with confidence
Adjustable Rate (ARM) Advantages:
- Starts with a lower monthly interest rate than a fixed rate loan
- Flexibility if you expect future income growth or plan to move or refinance in a few years
- Your interest rate is fixed for 5, 7, or 10 years (based on the product), and becomes variable for the remaining loan term, adjusting every year thereafter.
Conventional loans only require a monthly mortgage insurance fee only when the homeowner puts down less than 20 percent. The mortgage insurance is often lower than that of government backed loans. With a conventional loan, you can cancel your mortgage insurance when the principal loan balance drops to 78% of the home’s value. Borrower’s can use this type of loan for second homes and investment properties.
