What are Conventional Home Loans?
Are you thinking about the traditional home mortgage? or are you interested in learning more about the options?
If yes, then you’re in the right spot.
In this Q&A, I’ll explain what traditional mortgages are and the different kinds, and how to determine if you’re eligible.
What are traditional home loans?
An ordinary home mortgage, also called a conventional loan is a type of loan that isn’t insured or guaranteed through any federal agency such as those of the Federal Housing Administration (FHA) the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA).
In simple phrases the mortgages that aren’t backed by insurance or insured by these institutions are known as conventional home loans.
Do you know of more than one kind of conventional home loan?
Yes!
There are a few kinds that are conventional mortgages conforming or non-conforming loans, portfolio loans, jumbo loans, and sub-prime loan.
An conforming loan is one type of credit card that complies with the guidelines laid out by the two government-sponsored enterprise (GSEs) Fannie Mae and Freddie Mac.
These companies purchase loans from lenders and sell these to investors to get mortgages easily accessible.
On the other hand, mortgage loans that do not conform to the GSEs can be described as non-conforming or “non-prime.”
Jumbo loans are conventional loans that aren’t conforming to the rules which are greater than the limits on loan amounts that are set by GSEs and are also referred to as Jumbo mortgages.
Additionally, Portfolio loans are loans that are held by mortgage lenders who have their own books, meaning that they have the ability to establish their own rules on these types of loans.
It’s crucial to know that portfolio loans often offer advantages that other loans don’t, by allowing borrowers to utilize things like bonds and stocks as collateral.
Last but not least Subprime loans.
Subprime Loans are traditional loans crafted to help people who have bad or low credit.
They are subject to specific laws enforced by the federal government even when they’re not secured due to the higher fees and interest rates.
Now that I understand what is a Conventional loan is, how do I determine if I am eligible?
There are different requirements for lenders and the type of conventional loan. However, if you have a FICO score falls between 580 and more, you are eligible to apply now for an individual loan of that can be up to $25,000 towards your home.
To apply online now to get a quick decision, click here now to see your offers.