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Conventional Loans: Everything You Need to Know
What is a Conventional home loan?
A conventional loan typically offers a fixed interest or an adjustable-rate. Typical fixed-rate loans have a term of 30 or 15 years. With a conventional loan, purchase a home with as little as 3% down.
Down payments generally range from 3%-20% of the purchase price. Conventional loans tend to have cheaper mortgage insurance than any other loan program! The loan generally requires some form of mortgage insurance if the down payment is less than 20 percent. A conventional loan caters to those who have more money to put down & great credit scores. Conventional loans can be offered in 30-year, 25-year, 20-year, and even 15-year options. When choosing a mortgage loan, you can opt for a fixed-rate or an adjustable-rate. A fixed-rate mortgage never changes the interest rate during the loan’s life, whereas an adjustable rate can raise or lower depending on average interest rates at the time.
Is a Conventional Loan right for me?
Conventional home loans can have a fixed interest rate or an adjustable interest rate. Typical fixed-rate loans have a term of 30 or 15 years. However, Sun American Mortgage also offers 25-year, 20-year, and 10-year fixed-rate options. This type of home loan typically requires a higher down payment, usually 5%-20%. However, first-time homebuyers can now purchase a home with as little as 3% down!
What are the benefits of a Conventional Loan?
No private mortgage insurance with a 20% down payment. Closing costs & fees can be paid for by lenders in certain situations. Generally allows for quicker closings. Repayment terms are usually more favorable.
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