Conventional Loans

Conventional Loans

It’s not everyday that someone can make a cash offer on a home so the typical route is via financing. There are multiple ways to finance a home with a lender but the most common option is a conventional loan. The main difference between a conventional loan and other common loans like FHA or VA loans, is that conventional loans are not backed by the government.

Types of Conventional Loans

A non-conforming loan usually has a larger limit than conforming loans and also can be known as jumbo mortgages. Since these loans are above the limits set by Fannie Mae and Freddie Mac, they don’t “conform” so they are called non-conforming loans, but they do vary based on county so it is important to research the limits in the area in which you intend to purchase.

If you are looking for a loan for a specific purpose such as investment, you might consider researching portfolio loans. Portfolio mortgages are quite a bit different than other conventional loans so their terms and features can work out for those that may not qualify for a typical loan. This means that if you happen to have stocks and bonds that can be kept in portfolio for the life of a loan, you may qualify for this type of loan even if you don’t qualify for a typical loan.

The last type of conventional loan you may want to consider if you have a lower credit score is a subprime mortgage. The interest rate and fees are usually higher, but they do give those with less than perfect credit a chance to still purchase a home. These come with special regulations created by the government but they are not backed by the government so they are still considered conventional loans.

What Should I Choose?

If you’ve applied for any type of loan previously, you know that your financial situation is going to play a big role in whether or not you will be approved. If you are new on the search to find a home or securing financing, it’s a good idea to start thinking about your financial obligations and ability to come up with a down payment. If you are able to come up with a large down payment, you may have better options in regard to your interest rate to keep your monthly payments as low as possible.

The last thing to take into account when determining the type of loan that works best for you is why you are buying a home. If you are purchasing for the first time versus if you are looking for an investment, the type of loan is going to change based on your situation. If you want to stay in

the home until it’s paid off, you’ll want to make sure your payments are consistent over the life of the loan as well unless you think you’ll be refinancing at some point.

Contact Us Today!

We want to assist you on your financing needs so don’t hesitate to reach out. Whether you are just starting your search or have already narrowed it down to the home you want, we want to help figure out the best options for you. Reach out to the team at Lucey Mortgage Corporation today!

Conventional Loans

One of the most popular loan programs available in today’s market is the conventional loan. A conventional, or conforming loan, is a mortgage loan that is not guaranteed, or insured, by a federal government agency. This may be the perfect home loan for your purchase in Charleston, Mt. Pleasant, James Island, and the rest of South Carolina.

Conventional loans follow the guidelines set forth by Fannie Mae and Freddie Mac. These organizations, buy and sell conventional mortgages as well as setting restrictions on the maximum loan amount for borrowers. The loan limit for South Carolina is $424,100.

Conventional loans, have many advantages like flexibility when it comes to payng certain loan fees. You also have flexibility to the appraisal. Being the Biggest Little Lender in South Carolina, we have access to more options than just going to a bank. We can get creative and shop the best rates and and terms around.

There are two options for conventional loans; fixed rate and adustable rate programs.

Fixed rate programs are exactly that, you have a fixed interest rate for the entire life of the loan. When rates are low this is a great option because if rates go up you do not have to worry about it affecting your loan and payments. Fixed rate loans come in 15 year and 30 year options.

With adjustable rate programs, your interest rate can fluctuate causing your loan payment to rise or decrease. Some of the more popular adjustable rate programs are those that are fixed for a certain amount of years and then turn into adjustable rates. These programs include 3/1 arm, 5/7 arm, 7/1 arm, and 10/1 arm. The first number is the amount of years the loan will be fixed before it turns into a fully adjustable rate.

Even with the flexibility, conventional loans have more strict requirements including a higher down payments but do have lower interest rates.

Find out if a conventional loan is right for you, click here to get started or call 843-884-8133.

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Lucey Mortgage Corporation
861 Coleman Blvd
Mount Pleasant, SC 29464

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