Traditional loans that are not insured by government agencies (FHA, VA, RHS) are referred to as conventional loans. The most common type of Conventional Loan is a fixed rate mortgage loan, but there are also Conventional ARM loans.
Conventional loans are said to be "conforming" if they adhere to the guidelines set by Fannie Mae and Freddie Mac, and are said to be "non-conforming" or "jumbo" if they exceed these limits. Here at Shore Mortgage we only offer conforming loans.
· Conventional loans have more strict qualification guidelines and are ideal for borrowers who have excellent credit.
· Interest rates for conventional loans tend to be lower than interest rates for government loans (FHA, VA, RHS).
· Down-payment requirements are generally between 5% and 20%.
· Loans with a lower down payment will generally require private mortgage insurance (PMI).
· Conventional loan limits are $417,000 for a one-family home, $533,850 for a two-family home, $645,300 for a three-family home, and $801,950 for a four-family home.
