Conventional Home Loans
A Conventional Loan is a mortgage that is not backed by any Government agency, such as the Federal Housing Administration (FHA), Veterans Administration (VA) or USDA (United States Department of Agriculture). Conventional loans must meet the lending requirements of Fannie Mae and Freddie Mac, the two largest buyers of mortgage loans in the US. Most conventional mortgages are issued by private lenders who then sell the loan to one of these Government Sponsored Entities (GSE’s).
Pros
- Higher loan limits than FHA Adjustable-rate and fixed-rate loan terms available
- No private mortgage insurance (PMI) with 80% loan-to-value ratio
- Available for second homes and investment properties PMI cancels when the LTV reaches 78% Lower PUpMI rates than FHA Conventional 97 with 3% down
- Flexible down payment options.
Cons
- Credit score requirement is higher than FHA (minimum 620-640)
- Possible higher down payment requirement (3%-20%) depending on factors of the loan
- Qualifying guidelines are more strict
- Low-income borrowers may not qualify
A conventional loan may be a good fit for you if…
- Minimum Fico credit score of 620
- Have a 20% down payment
- Have a high income (low debt-to-income ratio)
- Need a loan amount that is above the FHA loan limit
Ready to talk to one of our local St Marys loan specialists about a conventional loan on a home in Camden County? Get in touch today!
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