Conventional loans boast great rates, lower costs, and home buying flexibility. They are the loan option of choice for about 60% of all mortgage applicants.
Conventional loans are also known as conforming loans, since they conform to a set of standards set by Fannie Mae and Freddie Mac. The following are highlights of this program.
- You can use a conventional loan to buy a primary residence, second home, or rental property.
- Conventional loans are available in fixed rates, adjustable rates (ARMs), and offer many loan terms usually from 10 to 30 years
- Down payments as low as 3%
- No monthly mortgage insurance with a down payment of at least 20%
- Mortgage insurance is cancelable when home equity reaches 20%
- Conventional 5% down on purchase with 3% seller concessions, min credit 620
- Conventional refi up to 95% rate and term, min credit 640