Conventional loans are the most common of all loans. These loans are typically sold to Fannie Mae or Freddie Mac. Conventional loans do not come with a government guarantee and require a down payment. For down payments that are less than 20% of the purchase price, mortgage insurance is required. Conventional loans can be used to purchase a primary residence, second home, or investment property.
All Conventional Loans require a down payment. Almost all conventional loans require a down payment of 5%. If the down payment is less than 20% then the borrower is required to pay mortgage insurance. The mortgage insurance is usually paid monthly and insures the lender is made whole in the event of a default by the borrower. Conventional loans require a minimum credit score of 620 with a 20% down payment or a credit score of 680 with less than 20% down.
Conventional loans are a good fit for borrowers who are well quailed and have enough savings to put 20% down. Conventional loans are the only loan type that allows borrowers to purchase a second home or investment property.
A Conventional loan has the same closing cost as any other loan. If a homebuyer does not have at least 20% to put down on the purchase, mortgage insurance will be required.
- Conventional loans are a good option for homebuyers with excellent credit, a small amount or no debt, and enough saving for a 20% down payment.
- Without a 20% down payment, private mortgage insurance is required for all conventional loans.
- A credit score of 620 is required for a Conventional Loan with 20% down payment.
- A credit score of 680 is required for a Conventional Loan with less than 20% down payment.
- Conventional loans can be used to purchase a second home or investment property.
Our goal at Security America Mortgage is to match the best product to the needs of our clients.
In addition to offering VA Home Loans, we offer Conventional, FHA, and USDA loans. Contact us today to discuss your loan options and determine which loan is best for you!