Conventional loans are also often referred to as "conforming loans," because they meet the guidelines set by Freddie Mac and Fannie Mae. The most notable guideline is that the maximum loan amount is $424,100 (except in high-cost areas where higher limits may be available).
There are several benefits of conventional financing, including:
You can buy a primary residence, second home, or rental property with most conventional loans
You have the choice of fixed rates, adjustable rates (ARMs), and loan-term options from 10-30 years
Down payments are as low as 3%
You pay no monthly mortgage insurance with a down payment of 20% or more
Mortgage insurance costs less than with government loans and may be cancelled when your home equity reaches 20% if certain conditions are met
Did you know? More than half of all mortgage loans are conventional loans, and Freddie Mac and Fannie Mae are the two largest investors.
If you're a first-time homebuyer and are struggling to save up for a large down payment on a home, the Conventional 97% program may be just what you need. It can be a great alternative, and is often more affordable than FHA loans . With a Conventional 97% loan program, you can:
Finance up to 97% of the home's value, with a down payment as low as 3%
Use gift funds for your down payment
Get lower mortgage insurance rates if you attend home counseling and meet specific income limits
We make it our goal to find the right loan for each homebuyer's needs.