Murfreesboro What are Conventional Loans?
Conventional home loans are one of the most popular loan options because it offers great rates, lower closing costs, and home buying flexibility. These home loans are offered by private wholesale lenders. A conventional, or conforming, home mortgage follows the guidelines set by Fannie Mae and Freddie Mac. While many think that a 20% down payment is required for all conventional home loans, many of our wholesale lenders offer low down payment options.
Other benefits of a Conventional home loan include:
- Can be used to buy a primary residence, second home, or rental property
- Conventional loans interest rates are available as a fixed rate or an adjustable rate mortgage (ARM)
- Loan terms usually from vary between 10 to 30 years
- Down payments can be as low as 3%
- No monthly home mortgage insurance with a down payment of at least 20%
- Lower mortgage insurance costs than with an FHA loan