Conventional mortgage loans may offer lower interest rates than other types of home loans. To qualify, they require good credit scores and loan-to-value ratios, and larger down payments than government-backed loans like FHA and VA – typically 20% of the purchase price.
They may even require less documentation, which could speed up the overall processing time. Conventional loans are available both as fixed-rate and adjustable-rate mortgages.
The interest rate on a fixed rate mortgage stays the same throughout the life of the loan. The most common fixed rate mortgages are 15 and 30 years long. Fixed-rate mortgages are good if you:
• Prefer a predictable payment
• Are locking in a low interest rate
• Plan to keep your home for more than 5 years
Payments on an adjustable rate conventional loan can fluctuate because the interest rate is adjusted to keep pace with the economy. The interest rate might be lower at first, and then change over time. That could work for you if you:
• Expect to own your home for 5 years or less
• Want to start with the lowest possible interest rate
• Anticipate your salary to increase
You can refinance both a fixed or an adjustable-rate conventional loan. Lower your current mortgage payment or convert from an adjustable rate mortgage to a fixed-rate mortgage. The two most important things you’ll need is a good credit score and a successful appraisal of your house. Closing costs are also required. The results of a rate and terms refinance could mean big savings.
Contact us today to see if a Conventional loan or loan refi is right for you!
Affordability is about more than how much you can borrow. Our calculator can help you with the details.
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