Conventional Loans

What are Conventional Loans?

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 LoansMost Common Types of Conventional Loans

Fixed Rate Mortgages: Your rate and payment never change.

  • 30 Year Fixed Loan
    Benefits: Lowest fixed monthly payments
  • 20 Year Fixed Loan
    Benefits: Low fixed monthly payments
  • 15 Year Fixed Loan
    Benefits: Lower rate than the 15 or 20 Year Fixed; Pay less interest and pay your home off more quickly.
  • 10 Year Fixed Loan
    Benefits: Lower rate; Pay off your loan and build equity faster.
  • 5 Year Fixed Loan
    Benefits: Lowest rate; Pay off your loan and build equity the fastest

Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.

  • 3/1 ARM
    Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
  • 5/1 ARM
    Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
  • 7/1 ARM
    Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years

What are the Conventional Down Payment Requirements?

For Purchase transactions Conventional Loans require the home-buyer to put down at least 5% - 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property. If you don't have enough equity to qualify for a conventional refinance - even if you owe more than your home is worth - you might be eligible for a HARP 2.0 Loan.

What types of property are eligible?

Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.

Find Out if a Conventional Loan is Right for You

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Homewood Mortgage NMLS# 294974

18170 Dallas Parkway, Suite 304
Dallas, Texas 75287
Phone: 214-507-1480
FAX: 972-387-9218
john@4bestrate.com
NMLS: 234686

BBBNMLS

Consumers Wishing to File a Complaint

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 RESIDENTIALMORTGAGE 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 ATWWW.SML.TEXAS.GOV.