The Conventional Loan
What is a Conventional Loan?
A conventional home loan is a mortgage that is not insured by the federal government, so their terms are more flexible than USDA, FHA or VA loans. Offering low interest rates, they’re a great fit for customers with good credit and financial stability who can afford a down payment.
Why would a Conventional Loan be the best choice for you?
Without Federal Government-mandated procedures to deal with, Conventional loans are simple to apply and qualify for. With tons of options and customizable terms available, we can craft a conventional loan that perfectly aligns with your financial status and long-term goals.
Required down-payments can be set as low as 3% of the home cost, making Conventional Loans more attainable than ever. By confirming our customers’ financial stability and credit score, we can offer amazingly low interest rates.
Qualifying for a Conventional Loan
You should also carry good credit (typically a FICO score of 620 or greater), and total debt that does not exceed 45% of your income.
You’ll also likely need to provide a down payment on the home (as low as 3%, but ideally 20% or more in order to remove the possibility of paying a monthly Mortgage Insurance tax).
Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, dies or is unable to meet the contractual obligations of the mortgage. One commonly-required insurance type is Private Mortgage Insurance (PMI).
As of 2021, that limit for most of the country is $647,200. AnnieMac is now offering a 2023 conforming loan limit of $700,000 in anticipation of the Federal Housing Finance Agency's conforming loan limit increase announcement. Conforming loan limits can go higher in counties where the housing costs exceed the national average.