Most Common Types of Conventional Loans
Fixed Rate Mortgages: Your rate and payment never change.
- 30 Year Fixed Loan
Benefits: Lowest fixed monthly payments
- 20 Year Fixed Loan
Benefits: Low fixed monthly payments
- 15 Year Fixed Loan
Benefits: Lower rate than the 30 or 20 Year Fixed Loans; Pay less interest and pay your home off more quickly.
- 10 Year Fixed Loan
Benefits: Lower rate; Pay off your loan and build equity faster.
- 5 Year Fixed Loan
Benefits: Lowest rate; Pay off your loan and build equity the fastest
Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.
- 3/1 ARM
Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
- 5/1 ARM
Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
- 7/1 ARM
Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years
What are the Conventional Down Payment Requirements?
For Purchase transactions Conventional Loans require the home-buyer to put down at least 5% – 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property.
What types of property are eligible?
Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.