What is a Conventional Fixed Rate Mortgage?
The Conventional Fixed Rate loan is one of the most popular mortgage products on the market today. This loan is a viable option for customers looking to either purchase a new home, or refinance their existing mortgage. The Conventional Fixed Rate Mortgage is owned by Fannie Mae and Freddie Mac, and is considered a Non-Government Sponsored Loan. Unlike FHA, VA, USDA, and other loan products administered through governmental agencies, Conventional Mortgage Loans do not require an upfront mortgage insurance premium. The Conventional Fixed Rate Mortgage provides loan flexibility and a wide variety of options (talking about loan terms), making this industry wide product a favorable loan for any customer.
Top 5 reasons to get a Conventional Fixed Rate Mortgage
Do I Qualify?
Conventional Fixed Rate Mortgage Requirements
- My credit score is higher than 620
- Down Payment Requirement of 5% (3% Down Payment Requirement under special FNMA and FHLMC programs)
- Private Mortgage Insurance will be required with less than a 20% down payment on a purchase
- This will be my Primary Residence (No Secondary or Vacation Homes Allowed)
- My loan will be less than $424,100 - view loan limits in your area
Pros and Cons of Conventional Fixed Rate Loans
- Higher maximum loan amounts
- Mortgage payment remains consistent from month to month (Fixed Rate)
- Conventional loans are generally less expensive over the course of the loan life
- Down payment as low as 3% for Conventional 97% LTV
- Mortgage Insurance Premium not required for the life of the loan
- Ideal choice if you plan to stay in your home 10 years or longer
- Reserve funds are often required
- Higher credit score requirements
- More difficult to qualify for compared to FHA
- Higher interest rates
Frequently Asked Questions about Conventional Home Loans
- Why Do so Many Home Buyers Choose the 30-Year Fixed?
- When most people think of mortgages, they think about 30-year fixed rate loans. There are lots of reasons that borrowers choose the 30-year fixed but the most popular is probably the security of knowing what you'll be paying over the life of your loan. While some people know they will only be in their homes for a finite amount of time and an adjustable-rate mortgage (ARM) will save them money, many prefer the added predictability of a fixed-rate loan.
- What Is Private Mortgage Insurance (PMI) and Will I Have to Pay It?
- If you're unable to put down 20% or more on a conventional loan, you will probably be required to pay PMI (private mortgage insurance). On conventional loans, PMI can often be less than mortgage insurance on FHA loans when the borrower has good credit.
- What Are the Credit and Income Requirements for a Conventional Loan?
- Conventional loans may be best suited for those with a credit score of 680 and above, even though PennyMac only requires 620 or higher, depending on the transaction. While borrowers with lower scores may still qualify, they will probably be better off looking at other mortgage products that are better suited for the particulars of their financial situation.
- What Kind of Properties Can I Buy with a Conventional Mortgage?
- Conventional mortgages are relatively versatile loan products that can be used for a wide range of different types of properties. Some of the properties you finance with a conventional mortgage include: Single Family Homes, Planned Unit Developments, Condominiums, and more.
Why Should You Choose RMS For Your Conventional Rate Mortgage?
Our Goal is to Provide Our Clients with Outstanding Service!At Residential Mortgage Solutions, we pride ourselves in training an already experienced sales staff and are committed to providing the best personalized professional service to all of our clients, regardless of credit history. It is a requirement that all of our mortgage consultants become fully licensed and certified in all states which we do business. Every mortgage consultant that is part of our team is well versed on both federal and state laws regarding mortgage lending and sound business ethics as it relates to the mortgage loan process. Learn More About Our Process
Our Reputation Speaks for Itself
- Fill out our user-friendly use online application with at the convenience of your own home
- Upload, drag and drop needed documents through your personalized Encompass loan portal- No more copying, scanning, and faxing, as it is completely paperless!
- Track the status of your mortgage application from application through closing with our realtor login system
- 30 Years of experience working with Conventional Mortgage Products
- In-House Underwriting
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