An Introduction to Conventional Fixed Rate Loans
Borrowers looking for a low, fixed rate that plan on living in the home for a while often turn to the comfort of a conventional loan.
If you’re looking to stay in your home for a while, a fixed-rate conventional loan provides the stability of a principal & interest monthly payment that won’t change. Borrowers with funds for at least 20% down can also save by eliminating the need for mortgage insurance. This is a great option for buyers selling a current home with equity or refinancing out of an ARM or FHA loan.
Low, Fixed Rate
Conventional loans can offer the stability of a low, fixed rate with a payment that won’t change from month to month and feature a wide variety of term options.
No Mortgage Insurance (MI)
Borrowers putting 20% down or more on a conventional loan can save $ by eliminating the need for mortgage insurance. Those putting less than 20% down can also eliminate MI down the road once enough equity has built up.
A little help from my friends
Just because you’re aiming to put 20% down doesn’t mean you can’t use a little help. Conventional loans allow for both seller concessions and gift funds from friends or family.
Conventional Fixed Rate Loan Details:
- No mortgage insurance on loans with 20% down or more
- Stability of a low, fixed rate and payment that won’t change month to month
- Wide vareity of loan terms available
- Purchase & Refinance options
- Seller paid closing costs or concessions up to 3-6% of sales price depending on LTV
- Gift funds allowed for down payment
- 3% minimum down payment
- Entire down payment may come from gift funds
(talk to me about this early in the process!)
- Non-occupying borrowers are allowed to help the occupying borrowers qualify for the loan. A great option for parents looking to help their children buy their first home!
- Conventional loans with less than 20% down can require mortgage insurance, but also have the ability to cancel mortgage insurance once enough equity is present