Home Mortgage Specialists, Inc. offers are conventional loans. Conventional loans are mortgage loans offered by non-government sponsored lenders. A conventional mortgage is offered by a bank and is not insured by the federal government and follows guidelines set by Fannie Mae and Freddie Mac. This makes it a slightly higher risk for the bank, so the qualifications can be more such as higher credit score minimums and lower debt to income ratios. Like other types of mortgages, the interest rate that you pay is based on the 10 Year Treasury Yield, credit score and loan characteristics. A conventional mortgage could have a fixed rate or a variable interest rate. Conventional loans have fixed terms from 30 Years, 20 Years, 15 Years, and 10 Years. Adjustable Rate Mortgages are usually amortized over 30 Years.
What is a Conventional Loan?
Conventional loans are loans made by private parties and nongovernment lending institutions without any government insurance or government guarantee against loss for the lender. Mortgage loans that are not FHA, VA or USDA (or RHS) loans are conventional loans. They may be conforming or nonconforming.
While many think that a 20% down payment is required for all conventional loans, many lenders now offer less than 20% down payment options. As low as 3.00% down payment loans.
Conforming vs. Non-Conforming Loans
Conventional loans are split into two types: conforming and non-conforming. Conventional loans that conform to the eligibility guidelines for purchase by Fannie Mae or Freddie Mac are considered conforming loans. Fannie Mae and Freddie Mac have a maximum loan limit for loans they will purchase, which is adjusted annually.
Loans to persons with satisfactory credit but which exceed this loan limit are called jumbo loans or nonconforming loans. Because these loans cannot be sold to Fannie Mae or Freddie Mac, they often have a higher interest rate than conforming loans.
Benefits of Conventional Loans
Conventional loans are intended for borrowers with stable income and credit scores, and have good rates and flexibility.
Conventional Loan Limits
Different counties have different limits on how much you can borrow for a Conventional Loan. Currently the conventional loan limit is $510,400.00
Get Pre-Approved for a Conventional Loan
If you are looking to purchase a home in Peoria, or anywhere in Illinois, contact Home Mortgage Specialists, Inc. at (309) 222-8286 for more information, or simply fill out the form on this page.