WHAT IS A CONVENTIONAL MORTGAGE
A conventional mortgage is a traditional home loan that is not insured or guaranteed by the government. Conventional mortgages are offered by private lenders, such as banks, credit unions, and mortgage companies. Because they are not backed by the government, conventional mortgages typically have stricter credit and income requirements than government-backed loans. However, they also offer more flexibility in terms of loan amounts, interest rates, and repayment terms .Overall, conventional mortgages are a popular choice for borrowers who have good credit, stable income, and a solid financial history, and who are looking to purchase or refinance a primary residence, vacation home, or investment property.
There are a few reasons why someone may choose a conventional loan, including:
1. More flexible terms: Conventional loans can have a range of term options, so borrowers can find a loan that fits their needs.
2. Potential for lower costs: Conventional loans may have lower interest rates and fees than other types of loans.
3. No mortgage insurance requirement: Some conventional loans may not require private mortgage insurance (PMI), which can save borrowers money on their monthly payments.
4. Higher loan limits: Conventional loans may have higher loan limits than government-backed loans, which can be beneficial for borrowers looking to purchase homes in high-cost areas.
Ultimately, the decision to choose a conventional loan will depend on the specific circumstances of your financial situation. It's important to weigh the pros and cons of different loan options and one of loan officers will consult with you before making a decision.