What is a Conventional Mortgage?

By
Real Estate Agent with Come Home ATX

What is a Conventional Mortgage?

A conventional mortgage is the type of mortgage that applicants with good credit scores and enough savings for 5 - 20 percent down payment generally opt for.

Conventional mortgages can be either fixed rate or adjustable rate.

  • Fixed-rate mortgages lock in the interest rate at mortgage closing and the homeowner pays that same interest rate for the life of the loan. The length of the loan can be between 15 years and 30 years for a fixed-rate conventional loan.
  • Adjustable rate loans can be for three, five or 10 years, as the rates will reset themselves at the three-, five- or 10-year point. Adjustable rate conventional loans are best suited for those who plan to move in three to five years, as the mortgage process needs to be redone when the rate is reset.

The most popular conventional mortgage is a fixed-rate, 30-year loan, as it gives the homeowner a consistent figure to budget with, as the payments will remain consistent throughout the life of the mortgage.

 

Find out if you qualify for a Conventional Mortgage!!!

 

Thank you for reading, What is a Conventional Mortgage?

 

Comments (2)

Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

There are so many low down payment offerings out there it is a wonder there are so many conventionals.

Dec 16, 2013 07:07 AM
Come Home ATX
Come Home ATX - Austin, TX
Realtors

That's true Jeff, but if someone is an investor, or if you don't want mortgage insurance, a conventional loan makes sense. Low down payment doesn't always equal a cheaper mortgage.

Dec 16, 2013 12:06 PM