Conventional loans are defined as any mortgage loans that are not guaranteed by a government agency, such as the Federal Housing Administration. The loans that are backed by government agencies tend to be geared towards borrowers with average credit scores and borrowers who wish to make smaller down payments. These loans are also limited to specific amounts. Borrowers who can make a larger down payment, who have stronger credit scores and income, and who are interested in more expensive homes will often find that conventional loans to be a great option. At America Mortgage, LLC, we offer conventional loan options designed to meet the varying needs of Monroe residents, including 1% down payment programs!
Government sponsored entities such as Fannie Mae and Freddie Mac purchase most of the mortgages that are made by lenders. Each loan purchased by these entities must meet specific criteria. If a loan meets the criteria and is eligible for purchase, the loan is considered a conforming loan. Ineligible loans are called non-conforming loans. The size of a loan is often the first factor looked at when determining eligibility as loans greater than $424,100 are ineligible for purchase. Loans can reach as high as $636,150 in specially designated areas and still be eligible for purchase. The jumbo loan is a very popular non-conforming loan used by homeowners looking to purchase higher-priced homes. A jumbo loan is simply a conventional loan that exceeds the conforming loan limit for an area.
Conventional loans have historically required a 20% down payment. Lower down payment options on conventional loans are becoming very common. At America Mortgage, LLC, we are able to offer conventional loans with down payments as low as 1%. Contact us today for more information on our 1% down conventional loan program.
Depending on your personal goals and future housing plans, you may choose a fixed-rate mortgage, adjustable-rate mortgage (ARM), or hybrid ARM which combines both a fixed-rate and adjustable-rate mortgage. There are specific benefits to each type of rate for a conventional mortgage.
Fixed-rate mortgages feature a rate that will never change regardless of loan term or changes that occur in the market. Mortgages with a fixed-rate are most commonly available as 15-year, 20-year, or 30-year loans. Fixed-rate mortgages preferred by many homeowners as they offer peace of mind knowing their mortgage payment will remain constant for the life of the loan.
Adjustable-rate mortgages on the other hand have interest rates that will fluctuate over time as market rates change. ARMs often start out with a lower rate than similar fixed-rate mortgages meaning you pay less early on. This can make ARMs a great choice for someone who plans to relocate or refinance in the near future. Hybrid ARMs are a combination of fixed rate and adjustable rate mortgages. A 7/1 Hybrid ARM, for example, begins with a 7-year fixed period followed by yearly adjustments.
America Mortgage, LLC offers a variety of conventional loan options throughout Monroe and all of Washington. Whether you are purchasing your very first home, or refinancing an existing mortgage, we have a conventional loan option that will meet your exact needs. For more information on our conventional loan products, contact us today.