Conventional Loans: A Conventional Loan is not made by or insured by a government entity (like FHA or VA Loan). A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate. Conventional loans are likely to be harder to get as they are more stringent on credit qualifications and require a larger down payment vs. FHA or VA. The standard down payment for a conventional loan is 20 percent of the cost of the home. If you are unable to put down this amount, its possible to put as little as 5 percent down however, you will be required to purchase mortgage insurance. Mortgage Insurance protects the lender in case the borrower defaults on the loan. As for property condition, not as stringent as FHA or VA requirements but does have to be safe and habitable. REMEMBER...always consult your lender for more detailed information as I am not a lender. Things can change at any time. This is basic information to help you become familiar with the home buying process and terms involved. Contact me to set up your personal home buying consultation.
Posted on: Mon, 20 Jan 2014 23:57:34 +0000
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