Conventional Home Loan
Conventional Loans are not guaranteed or insured by any Government Agency
- Down payment required at least 5% of purchase price
- Minimum credit score of 620
- PMI required with less than 20% down payment
- Typically fixed in terms and rates.
ARM vs. FIXED RATE MORTGAGE
Adjustable Rate Mortgage (ARM)
- Fixed for a period of time, typically 5-10 years
- Amortized over a 30 – year term
- ARMs will have lower start rates than fixed-rate mortgages
- Market rates are adjusted to fixed period expires
Fixed Rate Loans
- Fixed for the entire term of the loan, 30, 20, 15, and 10-year terms.
- Rates will not change during the life of the loan
- These loans can be used for a purchase or refinance of a personal residence, second home, or investment property.
- PMI on Conventional Loans can be paid for upfront instead of monthly.
- PMI rates are much lower on Conventional Loans if down payment is 10% or more depending on credit score.