Conventional Home Loan

Whether you are recently married and buying your first home, or nearing the end of your career and purchasing a retirement property, National Home Finance can help.

Loans come in as many varieties as homeowners do. There are a lot of things to consider in order to know just which of these will fit you and your family.

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Conventional Loan Information

Types of Conventional loans

Conventional loans can be fixed-rate, adjustable, reverse, or refinance mortgages, depending on the buyer’s situation or needs.

Loan Limits

The conforming loan limit for a conventional loan is currently $726,200 (USD). Above $726,200 is considered a jumbo loan.

What is a Conventional Loan?

Historically, a conventional loan refers to a mortgage that is “non-governmental guaranteed or insured.” An FHA loan, for example, is a loan that is insured by the government and a VA loan is backed or “guaranteed” by the government. A conventional loan is offered by a bank, lender or broker, and the government does not insure it.

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How do I get a Conventional Loan?

For most conventional loans, you will need a down payment of at least 5% of the loan amount. If the loan-to-value (LTV) ratio is above 80% (if you pay less than 20% down), you will usually be required to purchase Private Mortgage Insurance (PMI).

Loan terms can go to different lengths: 15 or 30 years. The longer the loan term, the lower your monthly payment will be, which is why most people prefer longer terms. However, with longer terms, you will pay more in interest over the life of the loan.

A newer product is the Conventional 97% LTV mortgage. This conventional mortgage is backed by Fannie Mae and requires only a 3% down payment, which may come in the form of a gift from family or friends.

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