Conventional mortgage loans are commonly referred to as conforming loans and non-conforming loans. Conventional loans usually require proof of income and down payments of at least 5% for a purchase, and 10% equity for a refinance.
A conventional mortgage loan is said to be conforming when the loan amount is not more than $417,000. Often referred to as the conforming loan limit, the figure can vary especially in many areas of the country where the cost of living is relatively high. Example is San Francisco, where the maximum conforming loan limit figure is $729,750. It is best to talk to an experienced loan agent about conforming loan limits in your area.
Non-conforming loans refer to conventional mortgage loans that surpass the usual conforming loan limit. Although, these types of loans are classified as conventional loans, lenders may sometimes refer to them as either “high value” or “jumbo” loans depending on the loan amount. These loans are generally available with higher interest rates compared to the rates of conforming loans. It is best to talk to an experienced loan agent about non-conforming loan rates for loans in your area.
Features of Conventional Loans
Many lenders offer low down payment loans, but many require mortgage insurance premiums, especially with a down payment less than 20%. Some lenders will not require mortgage insurance premiums with low down payments, but it depends on the lender’s guidelines and rates. Conventional loans are not limited to retail lenders such as Bank of America, Wells Fargo, Chase or Citi Bank; there are many wholesale lenders that offer lower rates and more personal service.
Our agents work with wholesale lenders that offer lower rates and more personal service.
If you are looking for a no mortgage insurance loan, we source conventional home loans that offer financing any project for any kind of property whether condos, bungalows, duplexes, 2-4 unit residential apartments. Conventional loans offer a much more competitive rate in today’s market for those who have the income and down payment for a purchase or the equity for a refinance.
Advantages of Conventional Loans
In most cases, mortgage insurance is not required when acquiring conventional loans, especially when the LTV rate is met. As earlier mentioned, conventional mortgage loans can be used on any type of property and occupancy. Also, there are no maximum loan limits as high as that of the FHA.
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