What is a Conventional Loan?

 
A Conventional Mortgage is a popular choice among homebuyers because it typically offers lower interest rates and more flexible underwriting guidelines compared to government-backed loans. Conventional Mortgages are also known as Conforming Mortgages, as they must conform to guidelines set by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. These guidelines dictate the maximum loan amount, credit score requirements, and other terms of the loan.

To qualify for a Conventional Mortgage, borrowers must typically have a good credit score, a stable income, and a down payment of at least 3%. The amount that can be borrowed and the interest rate will depend on factors such as the borrower’s credit score, debt-to-income ratio, and the property’s value.

Conventional Mortgages have a fixed or adjustable interest rate, which determines the amount of interest that will be charged on the loan. A fixed rate is a set interest rate that will not change over the life of the loan, while an adjustable rate may change periodically based on market conditions.

Conventional Mortgages are not guaranteed or insured by the government, making them slightly riskier for the lender, but at the same time, it also allows for more flexibility in terms of interest rates and loan amounts.

In addition to the standard Conventional Mortgage, there are also a variety of specialized programs available for specific situations such as first-time homebuyers, those with low- to moderate-incomes, and those looking to refinance their existing mortgages.

At Hurst Lending, we offer multiple Conventional Mortgage programs at competitive rates to fit the needs of a wide range of borrowers. Our experienced loan officers will work with you to find the best program and rate for your specific situation and guide you through the entire process. Contact us today to learn more about our Conventional Mortgage options and see how we can help you achieve your homeownership dreams.