Conventional Loans

Mortgages that do not have their backing provided by a government body (like the Department of Veterans Affairs) are conventional loans. In short, the government does not guarantee ordinary mortgages. Instead, it is offered and certified by the private sector. Conventional mortgages make for a significant share of purchases and refinance and are provided by a variety of mortgage lenders, such as banks, credit unions, and internet lenders. Conventional mortgages typically correspond to the loan restrictions established by the Federal Housing Finance Administration, often known as the FHFA.

If you want to qualify for a conventional loan, you'll typically need a credit score of at least 620, but a score higher than 740 will help you receive the best possible interest rate. With a traditional loan, your ability to make a down payment as low as 3% may be possible. However, this will depend on your current financial situation and the amount you will be borrowing.

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Frequently Asked Questions

Mortgages are typically offered by financial institutions, such as banks and credit unions. Mortgages can also be obtained from other sources, including private lenders and government agencies.Mortgage rates vary depending on the borrower’s credit history, income level, loan-to-value ratio, type of property being purchased and other factors.

When should I refinance?

There are a lot of reasons to get a new loan. We only look at the cost of getting a lower interest rate. We don't look at how much you'll save on your payments, which can change the results because you're frequently borrowing less money. Then, we figure out how long it might take to get those costs back. In many cases, you, the borrower, won't have to pay any or very little of the costs. Even a slight change in rate can save you money. We also look at the remaining time on your mortgage. How much money you could save, and what you plan to do with the money you save from lower rates.

What are the points?

The no points, or based on paying 1 point, are references to a percentage of the total amount that can be borrowed. Since one point is equal to one percent of the loan, 1 point on a $100,000 loan would amount to $1,000. 1 point on a loan of 1.5% would be equal to $1,500.

Should I pay points to lower my interest rate?

Paying discount points to cut loan rates can be effective. Even if you anticipate staying in the property for a long time, the points may not be worth paying unless they provide a cost-effective return depending on the duration it takes to recover the costs. Points can often cut payments or increase borrower power.