Understanding the differences between the loan options currently available to you can help avoid unnecessary time and expense when trying to qualify for a mortgage. One of the most common loan programs is a conventional mortgage. This refers to a loan that is not insured or guaranteed by the federal government.
If the loan amount is under a certain limit, these loans adhere to guidelines set by Fannie Mae and Freddie Mac and are referred to as conforming loans. If they are above those limits, they are referred to as non-conforming loans. The maximum limit for a conforming loan depends on the county and state the property is located in. To find out the limits in your area click here.
Conventional loans can either be fixed-rate or adjustable-rate. With a fixed-rate mortgage, borrowers get the luxury of knowing their interest rate is set for the entire term of the loan. On the other hand, with an adjustable-rate mortgage, the borrower has an introductory rate for a fixed period followed by periodic adjustments according to the specific benchmark.
If your credit and income qualify and you want to purchase a new home, a conventional loan may be the right choice for you. Conforming loans require a down payment as little as 3% for a fixed-rate term.
Restrictions apply. See what you qualify for today!Contact Rebecca Ross