CONVENTIONAL LOANS
Conventional Loans are the most common type of loan. These loans are financed in the private-sector, so they are not government backed, but they do follow the guidelines of Fannie Mae (FNMA) and Freddie Mac (FHLMC). As these loans are not government backed, there is no guarantee to the lender if the borrower defaults, and the requirements are more stringent as a result.
With all that being said, if you have good credit and have money set aside for a down payment, conventional loans are both very affordable and a solid investment for the future.
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Here are some advantages to a conventional loan:
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No income limits.
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No purchase price limits.
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Flexible PMI (private mortgage insurance) programs for borrowers with less than a 20% down payment.
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Fixed + Adjustable rate options.
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Different term options, from 10 year to 30 year.
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No prepayment penalties.
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Seller concessions are allowed.