Conventional Loans have always been the most ‘popular’ type of mortgage. Conventional Loans are mortgage loans offered by non-government sponsored lenders. A conventional, or conforming, mortgage typically adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate (ARM). Bank of England Mortgage Troy offers Conventional Mortgage loans anywhere in the country!
What is a Conventional Loan?
While many think that a 20% down payment is required for all Conventional Loans, Bank of England Mortgage Troy now offers Conventional programs with much lower down payment options. There are Conventional Loan programs with minimum down payments as low as 3% if you qualify! Keep in mind that private mortgage insurance (PMI) is typically required if you do not put at least 20% down on a purchase or have 20% equity when refinancing. In some cases, Alex Kandah may be able to prevent needing PMI with lower down payments or less equity.
Conforming vs. Non-Conforming Loans
Conventional loans are split into two types: conforming and non-conforming. Conforming loans fall within typical Fannie Mae and Freddie Mac guidelines and county loan limits. Non-conforming loans step outside of those guidelines or loan limits to jumbo loans or other alternate loan options.
Benefits of Conventional Loans
Conventional loans are intended for borrowers with better credit scores, and have good rates and flexibility. Conventional loans are available to borrowers with lower credit scores but typically are more advantageous to borrowers with higher credit scores, solid work history with documented income, and no derogatory credit instances such as foreclosures, short sales, or bankruptcies. Although, you are eligible for a conventional if you have had a foreclosure, short sale, bankruptcy, etc. after a certain amount of time has passed.
Conventional Loan Limits
Different counties have different limits on how much you can borrow for a Conventional Loan. The baseline conventional loan limit was increased to $484,350 in 2019 for one-unit properties. This means you may be able to purchase a home priced almost $510,000 with as little as 5% down in most counties! Some high-balance or high-cost counties have a baseline loan limit of $726,525 which gives you more buying power for higher priced homes there. The loan limits are also higher for two to four unit homes in all counties.
Get Pre-Approved for a Conventional Loan
Bank of England Mortgage Troy offers Conventional Mortgage loans in Troy, Rochester Hills, Birmingham, Ann Arbor, West Bloomfield as well as the whole state of Michigan and rest of the United States. For more information on Conventional Loans or how to get pre-qualified, call or text us today at (248) 633-8555.