Conventional Loans
Conventional Loan facts
A conventional loan is the most common type of mortgage. About 35-50% of mortgages, depending on market conditions and consumer trends are conventional mortgages. They are not insured or guaranteed by the government, thus it's available to anyone meeting the qualification requirements.
Conventional loans may be conforming or non-conforming.
Conforming loans means that they meet the stipulations set forth by Fannie Mae and or Freddie Mac.Non Conforming loans will not meet the stipulations set forth by Fannie Mae and or Freddie Mac (such as credit quality or loan-to-value ratio).
Conventional Loans vs FHA Loans.
Conventional mortgage rates are typically lower than an FHA Loan. Conventional financing does not require an upfront mortgage insurance premium when a borrower closes on the loan. With FHA financing, that fee for a 30 year loan is 1.75% of the loan amount.
One drawback to FHA loans is that the loan limits set for FHA loans ($271,050 for Texas except for San Antonio and Bandera which is at $332,500) are typically less than the loan limits for conventional financing ($417,000 in Texas). If a borrower is looking for a mortgage that exceeds the FHA loan limits for the area, the borrower would have to put additional money down on the property or finance under a conventional mortgage.
Please visit our FHA page to learn more about FHA loans in Texas
What are Conventional Loan terms?
They can be for a variety of terms ranging from 15 to 40 years, and they can have Fixed Rate or Adjustable Rates. Please visit the Loan Programs page for more information on determining which mortgage would be right for you. Conventional loans with less than 20% down require PMI (Private Mortgage Insurance).
Please call us at 210-656-1134 for a Complimentary home loan consultation.
Equal Housing Lender 