What are Conventional Loans?
Conventional loans are any home loans that are not backed by a government agency. Buyers with stronger credit and income or buyers who are searching for home loans that exceed the limits placed on government loans will find conventional loans to be a valuable option. At Mortgage Team 1, Inc, we offer great rates and terms on a variety of Mobile conventional loans.
Conventional loans are classified as either conforming or non-conforming loans. Conforming loans are home loans that meet certain criteria and are therefore eligible for purchase by Fannie Mae and Freddie Mac. Non-conforming loans do not meet these criteria making them ineligible. Typically, the loan amount is the first thing looked at when determining eligibility.
What are characteristics of Conventional Loans?
Historically, a 20% down payment was required for conventional loans although options with lower down payment requirements are becoming increasingly available. One advantage of making the traditional 20% down payment is that it allows the borrower to avoid private mortgage insurance (PMI). Even if they don’t have a 20% down payment available, PMI may be cancelled once 20% equity is reached.
Conventional loans are offered as either fixed-rate mortgages, adjustable-rate mortgages (ARM), or Hybrid ARMs. Borrowers will find there are benefits to both types of rate depending on their needs and financial goals.
Mortgage Team 1, Inc offers a variety of conventional loans options with great rates throughout Mobile and all of Alabama. Whether you are purchasing your first Mobile home or are interested in refinancing your current mortgage, we can provide a conventional loan option to meet your needs. For more information on our conventional loan offerings, contact us today. We are available even after hours!