What Is A Conventional Loan?
Conventional Loans are the typical choice for borrowers with good credit and the ability to place a downpayment on their desired property. Conventional loans are most notorious for offering borrowers no penalties or fees as well as giving the highest flexibility in the type of property that you are buying, primary second home or investment.
What can you expect with a conventional loan? If you have good credit, stable income, and access to a downpayment a conventional loan might be the right option to meet your lending goals.
Conventional Loans Include. . .
- Lower interest rates
- Flexible mortgage insurance options
- Fewer applicable penalties/fees
- Variations in loan terms
What Conventional Loan Programs Are Available?
- Adjustable-rate Mortgage:
- An adjustable-rate mortgage (ARM) is a loan term option with interest rates that can change periodically after the initial fixed-rate period has passed. Monthly payments with an ARM are susceptible to increases or decreases based on market fluctuations. Why would a borrower consider an ARM? If you plan on staying in your home for just a few years, you’re expecting a future pay increase, or the current interest rate on a fixed-rate mortgage is too high this may be the ideal program for you.
- Fixed-rate Mortgage:
- Fixed-rate mortgages are simply that, a mortgage with a locked rate that will carry through the lifetime of the loan. When selecting a fixed-rate mortgage, borrowers have the option of selecting a 10, 15, 20, 25 or 30-year term to pay back the loan. Lower term options have higher monthly payments, which helps borrowers build home equity and pay off the loan faster. If you plan on staying in your home for a longer time frame, a fixed-rate mortgage could be the right lending solution for you.
If you are interested in a conventional loan, please contact us today! We’ll be able to assess your financial situation and recommend the program to help you meet your goals.