Conventional Mortgage Loans
PrimeLending Provides Conventional Loans in Most States
What are conventional mortgages?
A conventional mortgage is defined as a type of mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. These terms include income requirements, credit score guidelines and down-payment stipulations.
Depending on the current market conditions and consumer trends, about 35-50% of all mortgages are conventional mortgages. Conventional mortgages may have a fixed or adjustable-rate and require down payment amounts anywhere from 5 to 20% of the total loan amount.
What types of conventional mortgages does PrimeLending offer?
PrimeLending offers several types of conventional mortgages to qualified borrowers in most states. PrimeLending offers its clients conventional loans with fixed-rates as well as conventional loans with adjustable-rates. The majority of states provide loan amounts up to $417,000, however, the cap is increased to $625,000 for Alaska and Hawaii. Loan amounts higher than the mortgages previously stated are referred to by PrimeLending as Jumbo Loans.
What are the differences between a conventional mortgage and an FHA loan?
Regardless of whether you choose to go with a conventional mortgage or an FHA loan, you will ultimately borrow money from a lending institution. However, there are several differences as listed below.
- An FHA loan is guaranteed through the Federal Housing Administration
- Conventional mortgages usually require at least 5% down payment, while FHA loans can be acquired with a down payment as minimal as 3.5%*
- FHA loan allows the qualified borrower to obtain 100% of the funding used for the down payment from a down-payment assistance program, relative or government agency
- If the qualified borrower of the conventional loan puts down 20% or more, the entire down payment can come from a relative – if the borrower chooses to put less than 20% down, then at least 5% of the down payment must come from their own personal funds
If you are interested in either a conventional of FHA loan, contact us today by using the form on the left or give us a call at (877) 482- 6967.
There appear to be many benefits associated with using an FHA loan, what are the benefits of using a conventional loan?
To start, an FHA loan requires borrowers to pay a nonrefundable premium equivalent to 1% of the total loan amount and a monthly payment toward their mortgage insurance. The borrower must maintain the mortgage insurance for the greater of 5 years or until their loan amount has reached 80%.
Therefore, conventional financing is an extremely attractive mortgage option to qualified borrowers who have enough for a down payment. The burden of mortgage insurance can be removed as soon as the loan amount has reached 80% of the sales price.
To contact a PrimeLending loan expert today, use the form to the left or call (800) 308-8503.