Conventional Loan Program
Conventional home loan is a mortgage that is not guaranteed (backed or insured) by the US federal government. Conventional Home Loans (also known as Conforming Loans) are mortgage loans made by local banks, and held on their portfolio until paid or sold. Fannie Mae and Freddie Mac purchase these mortgages that meet conventional loans limits, down payment requirements, debt to income ratios and other underwriting guidelines. Both Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are government sponsored entities created by congress to purchase conforming mortgage loans and resell them on the secondary market.
Like all home loans, Conventional loans have some advantages and disadvantages. Florida Conventional loans generally require a larger down when compared to FHA loans, VA or USDA Loans. Currently in Florida, you are required to put down a minimum of 10% in order to obtain a Conventional loan. Please note, this down payment requirement only applies to owner occupied primary homes. If you are looking for a second home or investment property Conventional loan in Florida, you can expect this down payment requirement to be 20% or more. One benefit is Conventional loans do not have the up- front mortgage insurance premium (MIP) requirement like all Government home loan programs. All Government loans require this, and the fee can range from 1-2% of your loan amount. However, Florida Conventional loans may require monthly private mortgage insurance (PMI) for down payments under 20%.
So what is the best mortgage option for you?
Well that depends on how much money you have available for a down payment. If you have 10% or more to put down on your new home, the Florida Conventional home Loan should certainly be looked at closely. If money is tight for a down payment, or you want to conserve your saving, the Government home loan mortgage options like FHA, VA or USDA, maybe worth a closer look. Contact us today, and we would be happy to review all these home loan options with you!
How can I get a conventional loan quote?
You can get a free conventional loan mortgage quote by submitting a rate quote request to Advance Mortgage Lending or by contacting our friendly mortgage professionals.
If you have additional questions or need assistance, please call us at 305-371-8181 or toll free at 855-224-3222.