Conventional loans are mortgage loans offered by non-government sponsored lenders. 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.
While many think that a 20% down payment is required for all conventional loans, we are now proud to announce low interest rate conventional loans as low as 5% down!
Benefits of a Conventional Loan
Conventional loans are the preferred mortgage for qualified borrowers. They have lower overall costs and allow you to remove the PMI at some point during the mortgage, which will result in a lower payment.
How do I qualify for a Conventional Loan?
Most conventional loans require a minimum credit score of around 640, however we have seen them approved as low as 620. You will need to have a stable and verifiable source of income and major derogatory items such as bankruptcies, foreclosures, short sales and repossessions will need to have aged a little longer than on an FHA loan. Most Conventional loans are done with as little as 5% down but you can avoid PMI if you are able to put 20% down!
Mortgage Insurance Premiums (PMI)
Private Mortgage Insurance, Mortgage Insurance Premiums or Mortgage insurance all refers to a type of additional insurance required any time you buy or refinance a home with less than 20% down (equity). This insurance is above and beyond your homeowner’s insurance and provides your lender the re-assurance they need in order to approve a loan with a small down payment. The good news here is two-fold. Firstly, it’s not expensive at all. Secondly, you can remove it once your loan achieves 80% LTV (Loan to value). So either by paying down your principal balance or by the home appreciating in value, once your balance is less than 80% of the current value, you can remove it and thus reduce your monthly payment for the rest of your loan!
Conventional Loan Limits for 2019
In 2019, Fannie Mae increased it’s Conventional Loan limit for 1 unit properties to $484,350 for the contiguous states as well as Puerto Rico. For Alaska, Hawaii and the U.S. Virgin Islands, their limit is $726,525. If you have a 2-4 unit property, the limit is even higher! Also, there are certain markets called High-Cost Areas who have even higher limits for 1-4 unit properties!
Apply now for a Conventional Loan!
Here at Streamline Financial Group, Inc. we take an educational approach to our business. We are known to be the friendliest loan officers in the Sunshine State and it truly shows in our work. We are 5 Star rated on both Zillow and Google and strive to make the process as simple and understandable as possible. We answer all calls by the 3rd ring or lunch is on us! It takes 10 minutes to find out if you qualify. Call us right now at (561)364-LOAN (5626)!