Conventional Loans

Conventional loans are one of the most popular mortgage options for homebuyers and real estate investors. Unlike government-backed loans, conventional loans are funded by private lenders and follow guidelines set by

Fannie Mae and Freddie Mac

. They offer

flexibility, competitive interest rates, and a variety of term options

to fit different financial situations.

Key Benefits of Conventional Loans:

✔

Lower Costs Over Time

– No upfront mortgage insurance required, and PMI (Private Mortgage Insurance) can be removed once you reach 20% equity.

✔

Flexible Down Payment Options

– As low as 3% down for first-time homebuyers and 5%+ for others.

✔

Variety of Loan Terms

– Choose from fixed-rate or adjustable-rate options with terms ranging from10 to 30 years.

✔

No Loan Limits by County

– Unlike FHA or VA loans, conventional loans don’t have strict county loan limits (except for conforming loan caps).

✔

More Property Flexibility

– Can be used for primary homes, second homes, and investment properties.

Who Qualifies for a Conventional Loan?

✅ Credit Score: Typically 620+, but higher scores get better rates.

✅ Debt-to-Income Ratio (DTI): Generally 50% or lower

.

✅ Stable Income & Employment: Proof of steady earnings and financial stability.

✅ Down Payment: 3-20%, depending on loan type and credit profile.

Types of Conventional Loans:

🔹

Conforming Loans

– Meet Fannie Mae and Freddie Mac guidelines (loan limits apply).

🔹

Non-Conforming Loans (Jumbo Loans)

– For high-value homes exceeding conforming loan limits.

🔹

Fixed-Rate Loans

– Consistent payments for the life of the loan (10-30 years).

🔹

Adjustable-Rate Mortgages (ARMs)

– Lower initial rates that adjust over time.

A conventional loan may be the right choice if you have good credit, stable income, and a solid financial plan. Want to explore your options? Contact me today to get started!