Conventional loans come in all shapes and sizes. From as little as 3% down to 20% or more.
What are Conventional Loans?
Unlike FHA and VA loans, conventional loans are not backed by government entities, such as the Federal Housing Administration (FHA) or the US Department of Veteran Affairs (VA). If you qualify for a Conventional loan, they tend to be the preferred loan type because it usually provides less costly options in borrowing. Although conventional loans tend to have stricter requirements on things like credit score, they tend to have less requirements when it comes to underwriting and documentation needed. The guidelines for these loans are set by Fannie Mae and Freddie Mac.
Who are Conventional Loans Best for?
Conventional loans are best for borrowers who meet the minimum credit score requirement. They also tend to be best for people who have good savings and are planning to put down higher down payment. However conventional loans now will allow as little as 3% down. Conventional loans also are the best option for people looking to buy investment property, or a 2nd home. They are also typically the best options for condos.
What are the Conventional Loan Options?
When most people think of Conventional loans, they think 20% down, or more. Conventional loans now come in all shapes in sizes. The minimum required down payment is 3% (although there is new programs coming out that will now allow 0% down). There are fixed and adjustable rates available. There is a max loan limit, however it tends to increase each year. To see the current max loan limit, click HERE.
There are multiple different Conventional loan programs available. Some examples are; Regular Fannie Mae, Regular Freddie Mac, HomeReady, Home Possible, HomeOne, Freddie Mac BorrowSmart, etc...
The conventional loan programs are always changing, and are becoming more available to a wider range of borrower. Call today to learn more about which program options are best for you. 407-834-3377