Conventional loans are usually home loans that are not guaranteed, nor insured with the help of the federal government. This means the actual details of the loan can be a lot different than what you might hear about them.
For example, loans that adhere to requirements set out by Fannie Mae and Freddie Mac usually ask for a down payment of 3%. The Federal Housing Administration also has pretty relaxed standards that can make it possible to have a down payment of 3.5%.
Loan programs backed by the federal government, aside from those through the Federal Housing Administration, include VA loans and USDA loans. VA loans are available for active military personnel and veterans, while USDA loans are targeted towards those who are buying rural property since they are backed by the Department of Agriculture.
On the other hand, conventional loans are seen as riskier because there is no one to guarantee them, but they can be more manageable for people to take on because insurance premiums can be lower than their government counterparts.
The typical profile of a person who takes on a conventional loan is often one who is financially secure, less likely to default, and prepared to put down a larger down payment.With such a high risk,conventional loans might come with a big down payment that could total up to 20% of the loan. However, some programs are offered where people can pay less to try to make the loan competitive with government offerings from the Federal Housing Administration.
Do you know how the mortgage loan process works? We want you to be educated on the process so you fully understand step by step how we are going to get you in the home of your dreams. We have a unique tool built specifically to help you understand the mortgage loan process from start to finish!
Schedule a MeetingConventional loans fall into two categories: conforming and nonconforming.
Conforming loans follow the Freddie Mac and Fannie Mac guidelines. The biggest rule makes the loan limit different depending on the area.
Non-conforming loans are designed for people who are not able to qualify for a conforming one. These usually come into play when the loan amount is higher than the conforming limit.
Nonconforming loans also come in a variety of types for different situations. They can be tailored towards people with poor credit, high debt, or made for those who recently went through bankruptcy.
Contact The Jimmy Webber Group today to get the help you need in getting a conventional loan!
The Jimmy Webber Group can help you compare the different types of conventional loans to make sure you are getting the product that suits your situation, while navigating you through any fees or other requirements. Generally, borrowers who have strong credit and can pay a big down payment are suitable for a conventional loan.
After getting your conventional loan and purchasing your home, you may think that everything is up to you to manage. But with The Jimmy Webber Group, you will continue to be supported and educated on how to manage your mortgage. The Jimmy Webber Group is a home ownership program that will guide you after your already have your home. We offer this so you have expert guidance at all times, always have a perfect mortgage experience and proactively maintain your home, which increases your home value over time! Contact The Jimmy Webber Group today to learn more about The Jimmy Webber Group”.
Purchasing a home is a big deal. Whether you are buying your first, or second home, our trusted and knowledgeable team can help. We have a program and process that‘s right for you. Check out our Helpful Home Buying Tips.
A preapproval lets you know your purchasing power and shows a seller that you are serious. Our experts are ready to help.
A great Real Estate Agent can help you find the right home and negotiate a great deal! An agent will also be critical in negotiating the price.
Look for homes online and in person. Narrow down your choice until you find the one you love. Work with your real estate agent to submit an educated offer.
Your offer was accepted, inspection’s complete, mortgage documentation in order. Once your offer has been accepted, we’ll work with you to finalize your loan and close the transaction.