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High Balance Conventional Loan
– Loan amount up to $822,375 in high-cost areas for a single unit
– Eligible for primary and second homes
– More competitive rates and easier guidelines
– Faster turn times
– Fixed-rate financing for easier budgeting
– Homebuyer education is required for first-time buyers
– Down payments as low as 3%
– FICO from 620
– Low income
– First-time or repeat homebuyers
– Homeowner education helps you understand and manage the long-term financial commitments of home ownership
– Loan amount up to $548,250
– You may use a conventional loan to finance a property in a high-cost area
– 15, 20, 25 & 30 years fixed rate
– Down payments as low as 5% depending on your loan amount
Conventional loans are mortgage loans offered by non-government-sponsored lenders. Conventional loans may be conforming and non-conforming and have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac, like Ginnie Mae, provide a continuous flow of affordable funds for home financing that results in the availability of mortgage credit homeowners.
Types of Conventional Loans:
- Fixed Rate Loans
- Adjustable Rate Loans (ARMs)
- Combination (Hybrid) Loans
- Balloon Mortgages and Pledge Asset Loans
- Jumbo / Construction Loans
- Reverse Mortgage
What Are the Advantages of Conventional Loan Financing?
There are several benefits of conventional financing, including the following:
- You can buy a primary home residence, second home, or rental property with most conventional loans. Government Loans do not allow this
- You have the choice of fixed rates, adjustable rates (ARMs), and loan-term options from 10-30 years
- Down payments as low as 3% with our traditional conventional options, 97% loan-to-value
- You pay no monthly mortgage insurance with a down payment of 20% or more
- Mortgage insurance may be cancelled when your home equity reaches 20% of the original appraised value
Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announce new loan limits every year.
10 Year and 15 Year Loan Options
A great loan term to payoff your mortgage quickly! These loans accumulate equity very fast but, come with a higher payment. The main advantage of these terms is the lower interest rate. They offer the lowest of any mortgage and are ideal if you can afford the monthly payments. If you are looking to own your home and payoff the debt quickly a 10 year or 15-year mortgage is the best option.
20 Year, 25 year and 30 Year Loan Options
These loans tend to have a slightly higher interest rate due to the length of the among of years. The main advantage of these loan options compared to the 10 year and 15 year loans is a lower payment. You can always pay more towards each payment to pay off at a quicker pace with no pre-payment penalties. If you plan to be in your home long-term or want a lower payment these options are a great solution.
Aloan Mortgage will help educate you on the specific loans you qualify for and if a conventional loan is right for you. Conventional products include Texas Purchase, Texas Refinance, and Texas Home Equity products.
The loan limit for conventional loans is $548,250 effective January 1, 2021. Loans higher than this loan amount will qualify under our Jumbo product guidelines. ALOAN Mortgage is a qualified conventional loan lender servicing clients in The Woodlands, Spring, Conroe, Houston, and surrounding areas as well as the entire state of Texas.
For more information about Conventional loans, their benefits, and loan options, and how they may apply to you, please contact us directly or submit the quick quote form on this page.