What is a Conventional Loan?
There are a number of loan options available to potential homeowners, and a conventional loan is one of the more popular choices. Conventional loans typically offer competitive interest rates and terms, making them a good option for those who are looking for stability. In addition, conventional loans often require a lower down payment than other types of loans, which can make them an attractive option for those who are just starting out.
However, it is important to remember that each situation is unique, and you may qualify for more than one type of loan. Our team can help you find the best loan option for your individual needs.
Types of Conventional Loans:
A fixed-rate loan is a loan in which the interest rate stays the same for the entire life of the loan. This means that your monthly principal and interest payments will never change, giving you clear expectations and peace of mind. Because fixed-rate loans eliminates surprises, it can be a good choice for borrowers who want to create a budget and stick to it. Learn more.
Adjustable Rate Mortgages (ARMs):
Adjustable-rate mortgages (ARMs) offer borrowers the opportunity to get a lower interest rate than they would with a fixed-rate mortgage. However, it’s important to be aware that the interest rate on an ARM will eventually change. The specifics of how and when the rate will adjust is determined by the loan terms. For example, a 5/6 loan will have a fixed interest rate for five years before beginning to adjust every six months. If you’re considering an ARM, it’s important to be aware of how the changing interest rate could affect your monthly payments down the road. Learn more.
HomeReady® & Home Possible®:
One of the biggest roadblocks for potential homeowners is saving up for a down payment. The good news is, there are several loan programs available that require only a 3% down payment. These include the conventional 97% loan, Fannie Mae’s HomeReady loan, and Freddie Mac’s Home Possible loans. Each program has slightly different income limits and requirements, but all offer 3% down loan options. This can make homeownership more attainable for those who might not have the resources for a larger down payment.
Don’t know which loan is right for you? Agora’s team of trusted loan officers are here to help. Please complete the form and we will get back with you within 24hrs. We’re sure we have something that’s right for you.
See if you qualify for a conventional loan.