Conventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by Fannie Mae or Freddie Mac.
However, conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 3-20% and reliable monthly income.
Conventional loans are ideal for borrowers with excellent credit and at least 3% down payment for Home Ready (Fannie Mae) or Home Possible (Freddie mac) or 5% down for all other conventional loans.
The 3% down Conventional Loans, Home Ready (Fannie Mae) or Home Possible (Freddie mac) are subject to income guidelines (80% of the Area Median Income Limits per zip code). They have lower mortgage insurance (MI) premiums than a standard conventional loan product and have slightly better pricing on the loans as well.
Ogden Mortgage Loans offers all different conventional loans throughout the state of Utah.
Fixed Rate Mortgages: Your rate and payment never change.
Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.
For Purchase transactions Conventional Loans require the home-buyer to put down at least 5% - 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property.
Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.