The conventional mortgage loan is one of the most popular mortgages. It offers the security of a fixed interest rate and lower monthly payments.
Highlights:
→ Purchase a home with as little as 3% down (Primary home).
→ Refinance up to 95% of your primary home’s value.
→ The 30-year time period is more suitable if you plan on living in your house for a long time or indefinitely.
→ There are no pre-payment penalties with a 30-year fixed mortgage, so you can always pay off your mortgage more quickly and put additional money toward principal.
Requirements:
→ Loan amount – The loan amount for a conforming mortgage is generally limited to $510,400 for a single-family home, though limits may be higher in counties where home prices are higher. Jumbo loans allow you to exceed the conforming loan limit to borrow for a higher-priced home.
→ Down payment – Most conventional loans will require at least 3 percent as a down payment. For loans with lower down-payment requirements, explore government-backed mortgages like FHA loans.
→ Credit history – Conventional loans generally require FICO score of 620 or higher. There are also established guidelines for income and other personal financial information.
How it works:
→ Monthly payments based on interest rate, principal loan amount, and amortized interest over 30 years.
→ Your payment will not change throughout the life of the loan.
→ Your actual payment will vary based on your situation and the current interest rates when you apply.
→ Pay off your mortgage at any time without pre-payment penalties.
→ 30, 20, 15 and 10-year terms are all available with fixed rates.
SCENARIO:
The payment on a $200,000 30-year Fixed- Rate Loan at 3.75% and 90% loan-to-value (LTV) is $926.33 with no points due at closing.The Annual Percentage Rate (APR) is 3.85%.
* Payment does not include taxes and insurance premiums.
* Rates are subject to change without prior notice.
* Loan information is informational purposes only and is not an offer to make a loan.