What Are Conventional Home Loans?
Conventional loans are mortgages that aren't guaranteed or insured by the federal government. Instead, they are available through and backed by private lenders, such as banks, credit unions, and online mortgage companies. These loans come in various forms such as fixed-rate and adjustable-rate options allowing borrowers to choose the best fit for their financial situation.
These loans are largely sought by:
- Salaried W-2 employees
- Self-employed individials
- Business Owners
- High-net-worth individuals
- Retired with pensions and 401(k)
Types of Conventional Loans
- Fixed-rate mortgages: These loans maintain the same interest rate throughout the loan term, providing consistent monthly principal and interest payments.
- Adjustable-rate mortgages (ARMs): ARMs offer a fixed introductory rate for the first three to ten years, after which the rate adjusts at preset intervals based on market conditions.
- Conforming loans: These adhere to guidelines set by the Federal Housing Finance Agency (FHFA) and fall within specified loan limits.
- Jumbo loans: Also known as non-conforming loans, these exceed the conventional loan limits and often have stricter requirements.
Interested in learning how a conventional loan can work for you? Contact us today to explore financing options tailored to your needs.