Homebuying May 18 2020

What is a Conventional Loan?

A Conventional home loan is a loan backed by Fannie Mae and Freddie Mac- two agencies that help standardize the mortgage industry- instead of a government agency.  It is also known as a Conforming loan as it conforms to the standards set by these two agencies. For the borrower, this means great rates and flexible qualifying guidelines. Conventional loans are the most popular type, reaching their ten year high market share in in the final quarter of 2018, making up 76.9% of all home loans.

A Conventional loan can require as little as 3% down. Because this type of loan is backed by a private lender rather than the government, if you put less that 20% down you are required to purchase Private Mortgage Insurance (PMI) to mitigate the risk to the lender. The good news is, you can cancel the mortgage insurance after your home equity reaches 20%. As of 2020, the maximum conforming loan limit for one-unit properties is $510,400. (or $765,600 in high-cost areas)

Who is a Conventional Loan Right For?

Conventional financing appeals to a wide demographic but this type of loan is best suited for those with a good credit score. While you can still qualify with a lower score, there may be higher costs associated with your mortgage. A Conventional loan can be used for primary residences, second homes, or even investment properties.

If you have good credit and money for a down payment, a Conventional loan may be the best option for you. In most cases, a credit score of at least 620-640 and a maximum debt-to-income ratio of 45% is required to secure a Conventional loan. Keep in mind exceptions can often be made and other loan options can be explored if you do not meet these requirements.

Conventional Home Loan Benefits

  • Down payment as low as 3%
  • Available in Fixed Rate or Adjustable Rate (ARMs) options
  • Various loan term options available
  • No monthly mortgage insurance required with a down payment of at least 20%
  • Lower mortgage insurance costs than an FHA mortgage
  • Mortgage insurance can be cancelled when home equity reaches 20%
  • Can use for primary residence, second homes or investment properties

Are you ready to start your homebuying journey? Speaking to a loan officer is a great place to start! If a Conventional loan is not right for you, Eagle Home Mortgage can present you with an array of home loan options to help you reach your goal of homeownership.

 

February 22 2022

NAMMBA Connect Tour 2022 - Sponsored by Lennar Mortgage

Lennar Mortgage is proud to sponsor NAMMBA Connect Tour 2022.

Read More

January 05 2022

How to Prep Your Home When Heading on Winter Vacation

For peace of mind when you're gone on a winter trip, here a few simple tricks and tips you can use to get your home...

Read More

December 14 2021

FHA Loan Limits Increase for 2022

Check out how the FHA is making things easier for those hoping to buy a home in 2022.

Read More

November 10 2021

Pet-Friendly Remodeling Ideas

Here are a few ideas for making some pet-friendly changes to our homes to make them more fun, friendly and comfortable...

Read More

November 03 2021

Fall Garden Cleanup Checklist

Find out which chores to skip, which are must-dos, and how to keep your garden looking beautiful in the fall.

Read More

October 27 2021

Should You Buy a Home with Cash?

Paying upfront instead of obtaining financing is often seen as a way of getting a leg up on other potential buyers. But is it...

Read More

October 19 2021

5 Ways to Make Your Offer Stand Out in a Tight Housing Market

With huge buyer demand and a shrinking inventory, this market means you'll need to be strategic, creative, and prepared in...

Read More

October 12 2021

Should I Buy a Home with an HOA?

In the excitement of buying a new home, it can be easy to overlook the presence of a Homeowners' Association, or HOA. But an...

Read More

October 04 2021

14 Brilliant Ideas for Decorating Your Porch This Fall

Simple and inexpensive solutions for a cozy, colorful porch that says "welcome."

Read More

12345Last

Search Results for query

May 13 2021

4 Questions You Must Ask Before Buying a Home

We've put together some questions to ask yourself when the time is right for you to buy a home.

Read More

May 06 2021

4 Mistakes Buyers Make in a Seller's Market

Buying your dream home in a seller's market is possible if you're able to avoid these common mistakes.

Read More

April 28 2021

Understanding Closing Costs

An important part of calculating your budget when home shopping includes considering closing costs, which are additional payments you will need to either pay upfront or roll into your loan and gradually pay off

Read More

April 21 2021

The Just-Right House

Home sizes in the U.S. have been growing steadily over the years, and with our sudden shift to stay-at-home living, new home buyers are thinking hard about what that means for them as they plan their dream homes. Here are a few factors to consider.

Read More

April 15 2021

How to Get a Mortgage When You're Self-Employed

Here are a few things you need to consider to land the best possible mortgage when you're self-employed.

Read More

April 07 2021

3 Surprising Refinancing Mistakes

When refinancing, be careful to avoid some pitfalls and traps that could cost you money in the long run. Here are some of the most common mistakes people make when they rush to refinance.

Read More

March 31 2021

10 Unexpected Spring-Cleaning Tips

Keep your home in the best possible shape with these surprising life hacks.

Read More

March 23 2021

Tax Season Tips for Homeowners

If you're a new homeowner, you might be wondering how homeownership affects your taxes. The answer is: It depends on one big thing—will you be itemizing your deductions or claiming the standard deduction?

Read More

March 11 2021

A Virtual Homebuying Helper: Lennar Homebuying Seminars

Online webinars are making it easier than ever to help buyers get educated and take the first steps toward their dream of homeownership.

Read More

First23456Last

Mortgage Calculators

Crunch the Numbers With Our Helpful Mortgage Calculators

Payment Calculator

payment calculator

Payment
Calculator

Affordability Calculator

affordability calculator

Affordability
Calculator

Refinance Calculator

refinance calculator

Refinance
Calculator

The Modern Digital Mortgage with a Personal Touch

Paperless. Effortless. Awesomeness TM

Simplify the home financing process with our Digital Mortgage. We'll be here to help navigate you through the entire process.

Get Pre-qualifiedWhat is a Digital Mortgage?