A Conventional Loan is a traditional home mortgage not insured or guaranteed by the government. It’s a popular choice for homebuyers due to its flexible terms and competitive interest rates. Conventional loans typically require a higher credit score compared to government-backed loans, but they can offer lower monthly payments and fewer restrictions.
Key Features:
- Flexible Terms: Choose from various loan term options, including 15, 20, or 30 years.
- Competitive Interest Rates: Often offer lower rates for borrowers with good credit.
- No Upfront Mortgage Insurance: Unlike FHA loans, conventional loans do not require upfront mortgage insurance.
- Private Mortgage Insurance (PMI): If your down payment is less than 20%, PMI may be required, but it can be removed once you reach 20% equity in the home.
Advantages of Conventional Loans:
- Lower overall cost over the life of the loan if you have a strong credit profile.
- More freedom to shop around for the best mortgage rates from various lenders.
- Potential to avoid PMI with a 20% down payment.
Who is it Right For?
- Borrowers with good credit (typically 620 or higher).
- Buyers with a down payment of at least 3% (for first-time buyers) or 5-20% for others.
- Those who want more flexibility in loan terms and are financially stable.
At Simplex Lending, we offer customized conventional loan options that fit your needs and help you secure your dream home. Contact us today to learn more and find out if a conventional loan is right for you!