What is a Conventional Loan?
Any mortgage that is not guaranteed or insured by the federal government is a conventional loan.
Generally, a conventional loan refers to a mortgage loan that follows the guidelines of government sponsored enterprises (GSE’s) like Fannie Mae or Freddie Mac. Conventional loans may be either “conforming” or “non-conforming”.
Conforming loans follow the terms and conditions set by Fannie Mae and Freddie Mac.
Non-conforming loans don’t meet Fannie Mae or Freddie Mac guidelines but they are still considered conventional.
Whether you’re buying a home or want or refinance your mortgage, a conventional loan might be right for you. If you’re unsure about your credit rating, or have concerns about a down payment, Conventional Mortgages can give you piece of mind with super low closing costs and flexible payment options.
Conventional Loans require the home buyer to invest at least 5% – 20% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $5,000 – $20,000.Maximum loan amount is $417,000.