Conventional Loans | Requirements & Guidelines for 2022
Also known as conforming loans, conventional loans “conform” to a set of standards set by Fannie Mae and Freddie Mac. Conventional loans boast great rates, lower costs, and homebuying flexibility. So, it’s no surprise that it’s the loan option of choice for over 60% of all mortgage applicants.
- Can use to buy a primary residence, second home, or rental property
- Available in fixed rates, adjustable rates (ARMs) with loan terms from 10 to 30 years
- Down payments as low as 3%
- No monthly private mortgage insurance (PMI) with a down payment of at least 20%
- Lower mortgage insurance costs than FHA loans
- Mortgage insurance is cancelable when home equity reaches 20% (unlike with the federal government-backed FHA loans)
Conventional mortgage down payment
Keep in mind, that the more you put down, the lower your overall loan costs. Your down payment amount helps determine your PMI rate and interest rate, which affects your monthly payment amount and https://americashpaydayloan.com/title-loans-mt/ overall interest costs.
You may also use gift funds from a parent or eligible non-profit agency to pay for your entire down payment and loan closing costs. Continue Reading