A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Types of Conventional Loans

Close-Ended Loans
Close-Ended Loans

Conventional loans maintain a reputation of being a safe type of loan, and there are a variety of conventional loans to choose from as well. The main difference between a conventional loan and other types of mortgages is the fact a conventional loan is not made by a government entity nor insured by a government entity.

Conforming Loans
Conforming Loans

That mortgage would be a conventional mortgage because it isn’t guaranteed by a government agency, and it would also be a conforming mortgage because the amount of the mortgage is less than the maximum loan limit for Fannie Mae or Freddie Mac to purchase it from the originating bank.

Conventional 97 (Fannie Mae)
Conventional 97 (Fannie Mae)

Fannie Mae offers 97% LTV/CLTV/HCLTV financing options to help lenders serve qualified home buyers and to support refinance of Fannie Mae loans. This is part of our ongoing efforts to expand access to credit for creditworthy borrowers and to support sustainable homeownership.

source: fanniemae.com
image: rubyhome.com
FHA Loans
FHA Loans

FHA loans also have some nice features that conventional do not. FHA loans are eligible for “streamline refinances” — which is a cheaper and quicker way to refinance your loan in a low interest rate period.

source: zillow.com
Home Possible + Home Possible Advantage
Home Possible + Home Possible Advantage

Cancellable Mortgage Insurance : Mortgage insurance (MI) can be cancelled after loan balance drops below 80 percent of the home's appraised value. Mortgage Flexibility: 15- to 30-year fixed-rate mortgages, 5/1, 5/5, 7/1 and 10/1 ARMs.

image: rubyhome.com
HomeReady (Fannie Mae)
HomeReady (Fannie Mae)

Unlike government-insured loans, with HomeReady, borrowers may have the option to cancel their mortgage insurance once their home equity reaches 20%. This can result in lower monthly payments down the road *Restrictions apply.

source: fanniemae.com
image: blog.fha.co
Jumbo Loans (non Government-Insured)
Jumbo Loans (non Government-Insured)

But, aside from being big, what exactly are jumbo loans or mortgages, and how do they differ from their conventional, less-sizeable counterparts? Fannie Mae, Freddie Mac, and Loan Limits. Roughly 90% of all mortgages written in the U.S. are backed by two quasi-public government agencies, Fannie Mae and Freddie Mac.

image: loans101.com
Non-Conforming Loans
Non-Conforming Loans

The maximum amount on a regular loan for a one-unit property is $417,000 in the lower 48 states. It’s $625,500 for Alaska and Hawaii. The limits on conventional loans are the same as the national maximum amount for FHA, except that they are generally flat nationwide. Higher limits apply in 39 high-cost counties.

image: snipview.com
Open-Ended Loans
Open-Ended Loans

Conventional loans maintain a reputation of being a safe type of loan, and there are a variety of conventional loans to choose from as well. The main difference between a conventional loan and other types of mortgages is the fact a conventional loan is not made by a government entity nor insured by a government entity.

Option 1: Fixed vs Adjustable Rate
Option 1: Fixed vs Adjustable Rate

What is the difference between a fixed-rate and adjustable-rate mortgage (ARM) loan? Answer: The difference between a fixed rate and an adjustable rate mortgage is that, for fixed rates the interest rate is set when you take out the loan and will not change. With an adjustable rate mortgage, the interest rate may go up or down.

Option 2: Government-Insured vs Conventional Loans
Option 2: Government-Insured vs Conventional Loans

A conventional loan is a type of mortgage that is not part of a specific government program, such as Federal Housing Administration (FHA), Department of Agriculture (USDA) or the Department of Veterans’ Affairs (VA) loan programs. However, conventional loans are commonly interchangeable with “conforming loans”, since they are required to conform to Fannie Mae and Freddie Mac’s underwriting requirements and loan limits.

Option 3: Jumbo vs
Option 3: Jumbo vs

The difference between current mortgage rates on conventional mortgage loans and jumbo loans has narrowed lately, making jumbo loans more appealing. Interest rates for a 30-year fixed-rate mortgage loan that conforms to the government limits were 3.75 percent in April, while rates for jumbo loans were only 3.85 percent.

Secured Loans
Secured Loans

Conventional loans maintain a reputation of being a safe type of loan, and there are a variety of conventional loans to choose from as well. The main difference between a conventional loan and other types of mortgages is the fact a conventional loan is not made by a government entity nor insured by a government entity.

USDA / RHS Loans
USDA / RHS Loans

USDA’s Rural Housing Service offers a variety of programs to build or improve housing and essential community facilities in rural areas. We offer loans, grants and loan guarantees for single- and multi-family housing, child care centers, fire and police stations, hospitals, libraries, nursing homes, schools, first responder vehicles and equipment, housing for farm laborers and much more.

source: rd.usda.gov
USDA Loans
USDA Loans

The Benefits Of USDA Rural Mortgage Loans USDA loans allow 100% financing, meaning no down payment is required. This is because USDA loans are insured, or backed, by the U.S. government. This is because USDA loans are insured, or backed, by the U.S. government.

VA Loans
VA Loans

The main difference between a conventional loan and other types of mortgages is the fact a conventional loan is not made by a government entity nor insured by a government entity. It's what we refer to as a non-GSE loan. A non-government sponsored entity. Types of government loans are FHA and VA loans.