Home loans can have a myriad of characteristics, terms, and rates, and there are over a dozen different types. Most home loans, however, fall into one of two umbrella categories: conventional or non-conventional. Non-conventional loans are often called government or federally insured loans because the government insures these loans—either partially or fully—against default.
Conventional loans will comprise around two-thirds of all home loans issued in the United States. These mortgages are not secured by the government; rather, they are issued by banks, mortgage companies, or other institutions, and commonly sold on a secondary market after closing. This means that the company that closes on the loan may not be the same company for the duration of the loan’s terms.
Conventional loans are divided into two further classes: conforming or non-conforming. Conforming conventional loans are called such because they adhere to the guidelines established by the two largest investors in conventional loans, Fannie Mae and Freddie Mac. These rules require that borrowers must:
You may be able to qualify for a conventional loan if you have good credit, stable employment history and some money for a down payment, so give Caliber Home Loans a call today to discuss your options.
Conventional loans can also be delineated by their rate terms. The two most common types are fixed-rate and adjustable-rate, or ARM. In a fixed-rate mortgage rate, the initial interest rate remains the same for the life of the loan. In an ARM, the interest can fluctuate with the market following an initial fixed-rate period.
Conventional loans have traditionally required a down payment of at least 20%, plus fees and closing costs. (Down payments of less than 20% require the purchase of private mortgage insurance or PMI.)
To learn more about Conventional loans, read this educational article.
Update the information below to estimate your monthly payment
Private Mortgage Insurance typically costs between 0.5% to 1% of the entire loan amount over 80% LTV on an annual basis.
Monthly Principal & Interests : $1145.80
Monthly Real Estate Taxes : $316.67
Monthly Insurance : $66.67
Monthly PMI : $0.00
Total Monthly Payments : $1529.13
Loan To Value Ratio : 80.00%
Months With PMI : 0 months