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What is a Conventional Loan?

Conventional Loans are the most common mortgage type you’ll come across and often the usual starting point for many when shopping for a mortgage loan, because they’re exactly what they sound like: conventional. They require a minimum down payment of 5%, for a maximum loan amount of $548,250. Also, seller concession is up to 3-9% of the sales price, while the Private Mortgage Insurance (PMI) required is over 80% Loan-to-Value (LTV), or the amount of the mortgage compared with the value of the property. While all of that may sound convoluted, it is fairly, well, conventional.

Who is eligible?

Conventional Loans appeal to borrowers with a strong credit rating (at least 620 to qualify, with a score above 740 to help you get the best rate) and can put a down payment of 3% or more. They’re not backed by a government agency, and the loan limits are set by the FHFA (Federal Housing Finance Administration). Conventional Loans down payment and income requirements are often set by Freddie Mac and Fannie Mae.

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Who is eligible?

Conventional Loans appeal to borrowers with a strong credit rating (at least 620 to qualify, with a score above 740 to help you get the best rate) and can put a down payment of 3% or more. They’re not backed by a government agency, and the loan limits are set by the FHFA (Federal Housing Finance Administration). Conventional Loans down payment and income requirements are often set by Freddie Mac and Fannie Mae.

What other loan types are available?

When it comes to loans, you have many more options than you think. Find out about some here:

Possibility starts here.
Find a loan officer near you to get started.

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