One of the most common loans is the Conventional Loan. This loan commonly comes with a fixed-rate which means the interest rate will not change for the life of your loan. However, you must meet certain criteria in order to get approved for this loan. The reward for this process is your rates are typically lower than that of VA and FHA loans.
If you know you’ll be moving in a few years, an ARM (adjustable-rate mortgage) might be a better option for your situation. This conventional loan type offers a rate that can fluctuate over the life of the loan but offers the lowest rate to start. This will make your monthly principal and interest payments lower.
Conventional Loans come in 30, 20, and 15-year lengths. The longer the term the lower the monthly payment. You will see yourself paying more interest over the life of the loan. So if you want to pay less out of pocket, in the long run, a shorter term mortgage might be the best fit for you!
What Benefits Do I receive from Conventional Loans?
- No interest rate surprises
- The best-fixed rate
- Fewer hoops to jump through – No Specialty Home Inspections
- Refinancing options available
What Do I Need To Qualify?
- Loan amount
- Down payment – Your Downpayment must be 5% or Higher
- Good Credit history