Conventional Mortgage

Conventional Mortgage

"Conventional mortgage" or "conventional loan" is a term you'll always encounter when shopping for a mortgage. After all, this common mortgage type is provided by most lenders.

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PIONEER MORTGAGE FUNDING INC./ conventional mortgage

What Is a Conventional Mortgage or Loan?

A conventional mortgage or conventional loan is any home buyer's loan that is not provided or secured by a government entity. Rather, conventional mortgages are available through private lenders, such as banks, credit unions, and mortgage companies.

The traditional fixed rate mortgage is the most common type of loan program, where monthly principal and interest payments never change during the life of the loan. Fixed rate mortgages are available in terms ranging from 10 to 30 years and in most cases can be paid off at any time without penalty. This type of mortgage is structured, or "amortized" so that it will be completely paid off by the end of the loan term. 

Even though you have a fixed rate mortgage, your monthly payment may vary if you have an "impound account". In addition to the monthly "principal + interest" and any mortgage insurance premium (amount charged to homebuyers who put less than 20% cash down when purchasing their home),  some lenders collect additional money each month for the prorated monthly cost of property taxes and homeowners’ insurance. The extra money is put in an impound account by the lender who uses it to pay the borrowers' property taxes and homeowners insurance premium when they are due. If either the property tax or the insurance happens to change, the borrower's monthly payment will be adjusted accordingly. However, the overall payments in a fixed rate mortgage are very stable and predictable.

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20% Down payment
Perfect Credit
Interest Rates
Finding A House
30-Year Fixed-Rate Mortgages

20% Down payment

Myth

You need 20% down to purchase a home.

Fact

This isn't true. If you take out a conventional loan, you can buy a home with as little as 3% down.

Perfect Credit

Myth

You must have perfect credit to qualify for a mortgage.

Fact

Credit plays a significant role in your ability to get a home loan. However, this doesn’t mean you need perfect credit to buy a home.

Interest Rates

Myth

Mortgage interest rates are the same no matter what lender you work with.

Fact

The truth is that rates can vary from lender to lender. So for your financial safety, you should shop around when looking for a mortgage loan.

Finding a house

Myth

Find a house, then worry about a mortgage.

Fact

This is terrible advice at any time, but in a hot seller’s market like today’s, believing this myth can lead you to miss out on a home altogether.

30-Year Fixed-Rate Mortgages

Myth

A 30-year fixed-rate mortgage is always the best choice

Fact

If you can afford higher payments, you can own your home outright in less time and for less money with a 15-year fixed-rate mortgage.

What kinds of Conventional Loans are available?

Conventional mortgages fall into "conforming" and "nonconforming" loans.

Conforming loans observe the guidelines set by Fannie Mae and Freddie Mac, two government-sponsored establishments that fund the U.S. housing market. The best-known regulation has to do with the size of the loan. In 2022, the conforming loan limitation for single-family homes in most continental U.S. is $647,200. Higher-cost areas, such as Hawaii and Alaska, have greater limits, up to $970,800 for single-family homes.

Many nonconforming loans are jumbo loans for home buyers who need to borrow an amount higher than the conforming limit for the area.

Other nonconforming loans include those made to borrowers with poor credit, high debt or a recent bankruptcy, or homes with a high loan-to-value ratio (usually up to 90% for a conforming loan).

Can I get down payment assistance with a Conventional Loan?

Yes, you may be able to qualify for down payment assistance with a conventional home loan. In addition, government agencies and community programs offer services to buyers struggling with complex financial situations, no matter what type of financing they use.

Suncoast Mortgage Firm LLC.

Our lending solutions use the perfect hybrid of human-driven insights and technical prowess to process loans faster and significantly reduce costs.

PHONE

(813) 599-3533

E-MAIL

tony@suncoastmortgagefirm.com

ADDRESS

8270 Woodland Center Blvd
Tampa, FL 33614

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Website Disclaimer : 

Effective Date: 9/1/2021
All loan approvals are conditional, not guaranteed, and subject to lender review of all information. A loan is conditionally approved when the lender has issued an approval in writing, but until all conditions are met, a loan cannot be funded. Specified rates may not be available for all borrowers. interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Suncoast Mortgage Firm LLC. is an Equal Opportunity Mortgage Broker headquartered in Tampa, Florida. This licensee is performing acts for which a mortgage broker license is required. Suncoast Mortgage Firm LLC. is licensed by the Florida Office of Financial Regulation, NMLS# 1936558. Suncoast Mortgage Firm LLC. is approved to originate Conventional, FHA, VA, and USDA loans, and has the ability to broker such loans to Conventional, FHA, VA, and USDA approved lenders. Suncoast Mortgage Firm LLC. is not acting on behalf of or at the direction of HUD/FHA or the VA.

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