A Conventional Loan is a special type of mortgage loan that is not under government insurance. The private lender is the one that backs this type of loan. The borrower will also be the one to pay every cent of the loan money. This is about the most common of all types of loans and it is more common than any of the government-backed loans. Studies show that up to 78% of borrowers opted for this loan to buy their new homes. This popularity is by a long shot, you will agree. A buyer will be able to enjoy more flexibility when he gets this loan. While it may have its benefits, it also has its disadvantages. For example, it tends to be riskier than a federal government-insured loans. At the same time, it is more challenging to get this type of loan compared to other mortgage loans.
Conventional Loan Qualifier.
A simpler and faster application.
Less paperwork. A shorter time to approval.
A conventional mortgage or conventional loan is a home buyer’s loan that is not offered or secured by a government entity. It is available through or guaranteed by a private lender or the two government-sponsored enterprises—Fannie Mae and Freddie Mac.
More outstanding features
As we have mentioned earlier, Conventional Loans are not backed by the government, unlike other loans, like the FHA loans and the VA loans. The borrower is only required to make a down payment of 3.5% for FHA loans as the mortgage insurance premium. If you default in paying the loan, the FHA will use the down payment to pay off the lender. Only current or returned servicemen can benefit from VA loans and the down payment for this loan can fall between 1% and 3%. The lender can be in trouble if you default in the payment of your conventional loan. The lender will consider selling your house in case you default in payment. Before you can be considered for a Conventional Loan, you will need to first pay the PMI, which stands for Private Mortgage Insurance. This is usually the case if your down payment is not up to 20%.
There are different types of conventional loans; they are:
- Conforming conventional loan: The loan is expected to be in compliance with set guidelines by Fannie Mae and Freddie Mac before you can be considered as qualified for the loan. Fannie Mae actually stands for the Federal National Mortgage Association, while Freddie Mac means Federal Home Loan Mortgage Corporation. The baseline for this loan is $453,100.
- Nonconforming conventional loan: This has to do with loans that are above the limit of $453,100.
It does not matter where you reside in the United States, you can always trust Mission Pacific Mortgage for Conventional Loan. We have been in the industry for long and can provide you with any type of Conventional Loan you may need, be it the conforming or the nonconforming type. We have years of experience under our belt and have served several clients over the years, making us one of the most reliable outlets you can ever partner with when you need a Conventional Loan.
We operate a full-service mortgage company and this means that you can rely on us to provide any mortgage you may ever need. The quality of the service we offer is not in doubt and you will find yourself always coming back for more. The processing is flexible and the loan will be available before you know it. You will also meet with highly experienced loan officers at our outlet.