What is a Conventional Loan?
Let Us Do The Work!
A conventional loan is basically any kind of lender agreement that's not backed in full by the Veterans Administration or protected by the FHA (the Federal Housing Administration). All told, there are several broad categories of conventional loans. Fixed rate mortgages are simpler in some cases. A home borrower “locks in” at an interest rate, and he or she pays down the principal and interest on the mortgage every month at that rate.
Other so-called conventional loans include conforming loans. Basically, these are arrangements that meet stipulations set forth by Fannie Mae and or Freddie Mac, two very large mortgage trading companies. Please refer back to our home page for more information on this or other loan programs.
While Fannie Mae and Freddie Mac don't actually approve or disapprove of loans, they buy and sell mortgages. Lenders enjoy signing borrowers up with conforming loan, since they can later sell these loans to Fannie Mea or Freddie Mac to get funds for other investments.
Conventional Loans typically are not 100% financing however they have excellent interest rates and lower MI factors. These loans are typically for the superior credit borrower.
Please call with any questions,
Tom 817-690-9296