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. Typically, conventional loans have better rates, terms and/or lower fees than other types of loans. However, conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 5-20% and reliable monthly income. Conventional loans are ideal for borrowers with excellent credit and at least a 5% down payment.
Conventional Loans (adjustable & fixed rates)
What are the Conventional Down Payment Requirements?
For Purchasing a Home: Conventional loans typically require a down payment ranging from 5% to 20% of the home's purchase price. For Refinancing: Most lenders generally require at least 10% equity in the property. In short, homebuyers must provide 5% to 20% down for a purchase, and for refinancing, at least 10% equity is usually required.
Which properties qualify? Most standard loan programs cover single-family homes, approved condominiums, planned unit developments, and 1-4 unit residential properties. You can also use a conventional loan to finance a primary home, vacation property, or investment property.
- 30 Year Fixed Loan (Lowest fixed monthly payments)
- 20 Year Fixed Loan (Lowest fixed monthly payments)
- 15 Year Fixed Loan (Lower rate than the 30 or 20 Year Fixed Loans; Pay less interest and pay your home off more quickly.)
- 10 Year Fixed Loan (Lower rate; Pay off your loan and build equity faster.)
- 5 Year Fixed Loan (Lowest rate; Pay off your loan and build equity the fastest.)
