Conventional Loan

Conventional Loan

A conventional loan is a type of mortgage that is not backed by any government agency, such as the Federal Housing Administration (FHA). These loans can feature either fixed or adjustable interest rates and typically require a down payment of 20% or more.

Since conventional loans lack government insurance, lenders assume a higher risk if the borrower is unable to repay the loan. As a result, homebuyers with lower credit scores may find it challenging to qualify for conventional loans, as lenders require more assurance that borrowers will not default on their mortgages.

For those who do not have a high credit score or cannot afford the substantial down payment associated with a conventional loan, FHA loans serve as a viable alternative. Because these loans are insured by a government agency, lenders can offer significantly lower down payment requirements and competitive interest rates, making homeownership more accessible for many borrowers.

Identity Theft

Identity theft is a serious crime where someone steals your personal information, like your name and social security number, to commit fraud.

Property Title

At closing, you receive the property title, confirming your ownership of the home. The title company issues it to show no one else has claims.

Single Family Home

A single-family home is an unattached dwelling. For an FHA loan, it must be owner-occupied, meaning the borrower intends to use it as their primary residence.

Loan Term

A loan term is the period during which a borrower makes monthly payments on a home loan. It can change based on the borrower’s payment habits and refinancing.

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