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  • Conventional Home Loans

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    • A conventional loan is generally considered a mortgage that conforms to Fannie Mae and/or Freddie Mac's guidelines and therefore considered a conforming loan.  Even though these two are government-sponsored entities, these loans are not guaranteed or insured by the US government unlike those that are - FHW, VA, and USDA.

      Because they conform to their guidelines, Fannie Mae and Freddie Mac typically buy these loans and sell to investors.  The purpose of this is to make home loans widely available.

      While conventional home loans are generally not an option for those with FICO scores below 620, if you qualify, it is sometimes possible to put down as little as 3%.  There are also other advantages to conventional loans:

      • Flexibility on property types - a conventional loan can be used to purchase a primary residence, a second home or even a rental property.
      • Mortgage insurance is not required unless the down-payment is less than 20%.  If you do have mortgage insurance, you can request that it be removed once your loan-to-value is 80% or less.
      • Unlike FHA, conventional loans have fewer restrictions when it comes to processing and inspections leaving fewer hurdles to overcome in the mortgage process.
      • Conventional loans also have higher loan limits that FHA loans in certain areas.