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.

Streamline Refinance

The FHA Streamline Refinance helps homeowners lower their interest rate and monthly payments on an existing FHA mortgage with a simplified process.

Origination Fee

Processing a mortgage involves a lot of work. As the borrower, you’ll need to pay an origination fee to cover the costs of setting up the mortgage.

Closing Disclosure

One of the most important documents in the mortgage process. This 5-page form lays out your loan terms, like monthly payments, interest rates, and closing costs

MIP

To qualify for an FHA loan, you must pay a mortgage insurance premium. This insurance protects lenders if you can’t make your monthly payments.

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