What is a Conventional home loan?

A conventional mortgage, sometimes referred to as a conforming loan, is a loan that is not insured or backed by any government entity. Instead, conventional loans follow guidelines set by Fannie Mae and Freddie Mac (agencies that help standardize mortgage lending in the US). Conventional mortgages range in length, with popular options being 10, 15 or 30 years. Interest rates for conventional mortgages are competitive and vary based on credit score, loan term and other factors.

Conventional Loan Features

  • No private mortgage insurance if putting at least 20% down
  • Conservative guidelines for minimum credit scores, down payment requirements and debt-to-income ratios
  • Typically fixed terms and interest rates

Is a Conventional loan right for me?

If you have a sizable down payment and good-to-excellent credit, a conventional mortgage may be a good fit for you. You may also want to consider a conventional loan to take advantage of certain benefits the product can offer. For example, there generally isn’t an up front funding fee. Conventional loans also typically provide some flexibility when it comes to property types and expectations that government-backed loan products don’t.

What if I can’t put 20% down?

Conventional loans require a monthly mortgage insurance fee, or private mortgage insurance (PMI), when a homeowner puts down less than 20%. Private mortgage insurance rates vary depending on factors like credit score and down payment. The premium for your mortgage insurance will be added to your monthly mortgage payments. The private mortgage insurance doesn’t cover the homeowner, rather it serves as protection for the lender to cover losses should you default on your home loan.

 
Have questions or interested in pre-qualifying? Aligned Mortgage is here to help.

Please visit our Disclosures page for more details for all loan types.

Aligned Mortgage - Waipio
94-539 Puahi Street
Waipio, HI 96797
NMLS #1696573
Licensed in Hawaii -Texas -Oregon -California
Waipio@AlignedMortgage.com
Phone 808-677-5626

Aligned Mortgage - Hilo
99 Aupuni St STE 108
Hilo, Hawaii 96720
NMLS #1727609
Licensed in Hawaii
Hilo@alignedmortgage.com
Phone (808) 495-0317

Aligned Mortgage - San Antonio
1027 Austin Hwy STE 101
San Antonio, TX 78209
NMLS #1695733
Licensed in Texas - California
SanAntonio@alignedmortgage.com
Phone 210-874-1630

 © 2018 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to ensure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions apply. Equal Housing Opportunity.
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Consumers wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the Texas Department of savings and mortgage lending, 2601 north Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.sml.texas.gov.

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