Conventional Loans: More Choices in Home Financing
If you are beginning on the path toward home ownership, financing is one of the first elements to consider. Conventional loans, also known as conventional mortgages, describe all home loans that aren’t backed or insured through federal programs. Conventional loans come in all shapes and sizes, with varied interest rates, down payments and terms. At Innovative Mortgage Services, we help clients in Port St. Lucie, Vero Beach, Stuart, Fort Pierce and surrounding Florida choose mortgages that work for their lifestyles and finances. If you are considering a conventional loan to purchase your first home or your tenth, our certified mortgage brokers can help. Contact Innovative Mortgage Services today to schedule a complimentary consultation about your home buying or refinance goals.
Is a Conventional Loan Right for You?
Conventional loans are called conventional because they are fully funded and supported through private lending agencies, like our lending partners at Innovative Mortgage Services. They differ from non-conventional loans like VA and FHA loans, which are partially funded or insured by the federal government.
Conventional loans typically have more stringent acceptance requirements than government-insured loans. These may include better credit history and lower debt-to-income ratio than are required of non-conventional loans. Conventional loan standards exist to ensure that borrowers are good candidates to pay their mortgage payments. Non-conventional loans are government insured, so they are less of a risk to lenders in the case that a borrower defaults.
Conventional Loan Benefits
If you are approved for a conventional loan, you will enjoy some benefits not available with government loans. Firstly, you can avoid private mortgage insurance (PMI) in many cases. If your mortgage is for less than 80% of the value of the home you buy – that is, you provide a 20% down payment – you can avoid paying PMI. In some cases, we can help clients avoid PMI even if they put down less than 20%. Our certified brokers can talk to you about certain programs that allow for this low initial investment. Depending on borrower credit, we can even offer conventional loans with down payments as low as 1-3%!
Unlike non-conventional loans, conventional loans are traditionally do not have a loan limit. There are two types of conventional loans: conforming loans (usually homes worth $424,100 or less) and non-conforming “jumbo” loans (homes worth $424,100 or more). We have approved many clients for both conforming and non-conforming loans in the Port Saint Lucie area and surrounding communities.
Conventional loans may have a fixed or variable interest rate. With a fixed-rate loan, the interest rate stays consistent throughout the full term of the loan. Variable interest rates, conversely, have changing interest rates throughout the duration of the loan. Both interest rate options have benefits depending on your unique needs. You may also have more choices when it comes to the term length of your conventional loan – from just a few years to 30 years.
Another benefit of conventional loans is that they are available for homes in more areas than some government loans. You can choose a conventional loan to finance more types of housing and in more areas than are allowed through USDA and FHA loans and grants.
The Right Decision for Your Financial Future
At Innovative Mortgage Services, it is of utmost importance that we connect our clients with the loans that work best for their unique needs. When you speak with us about conventional loans in Port St. Lucie, Vero Beach, Stuart, Fort Pierce or surrounding communities, we get to know you first. By understanding your financial and credit history, your current financial status and your goals in the future, we can help you identify the best loan options for your needs. Contact Innovative Mortgage Services today with any questions and to schedule a consultation about a conventional loan.