When deciding which loan program to go with when purchasing or refinancing a home, the one that is most commonly used is known as a conventional loan or a conforming loan. Conventional loans are loans that have guidelines that are set by Fannie Mae and Freddie Mac. These two government sponsored enterprises have set these guidelines to make these loans to give lenders like the ability to have sufficient funds to lend out at great low rates.
Perennial Mortgage Group, Sponsored by NTFN, Inc we have helped many people in the Raleigh North Carolina area to use conventional loans to purchase a home or refinance an existing loan.
Because of Fannie Mae and Freddie Mac guidelines conventional loans tend to have the lowest rates of all available home loan programs, which is why they are so popular. However with having such competitive low rates you will need to generate a higher down payment then you would with other government backed home loan programs, which are known for their low down payment options. Typically what you’ll see with a down payment with a conventional loan is 20%. The financial requirements also tend to be stricter compared to those government backed loan programs. However because of our many years of lending experience, we could potentially get you a loan with a lower credit score.
Generally conventional loans are perfect for people who have a good amount of money saved for a down payment and have excellent credit. Since this way you’d end up paying less for your home since you’d have the lowest possible rate and you’d take a big chuck out of the home price with a larger down payment of 20%. However we have access to options for a lower down payment.
Conventional home loan programs offer both a fixed rate and an adjustable rate option. With a fixed rate option you can lock in the current rate without the worry of it going up at some point in the future. This is a great option for people who like to have a consistent monthly bill, since it’s locked in. With adjustable rate mortgages you end up paying the lower rates then a fixed rate at the beginning of the loan, with it usually going up after a few years. Adjustable rate mortgages are great for people who don’t plan on staying in a home for a longer period of time, since eventually adjustable rate mortgages rates will raise.
If you are wondering if a conventional loan is right for you, or you want to see how much you could qualify for, we make it easy. You can use our Today’s Rates tool for a free custom rate quote.