Effective for loans closing after January 1, 2019, the maximum loan amount on Conventional mortgages is being raised to $484,350. It's the third consecutive year the maximum conforming loan amount has been raised. The previous maximum amount was $453,100. The higher loan amount allows for smaller down payments and easier underwriting guidelines!
Conventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by Fannie Mae or Freddie Mac. Conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 3-20% and reliable monthly income. Conventional loans are ideal for borrowers with excellent credit and at least a 3% down payment.
Monthly PMI can be eliminated with what is called Lender Paid Mortgage Insurance (LPMI). With this program, you pay a slightly higher interest rate, but there is no monthly mortgage insurance. The result is typically a much lower mortgage payment. Good credit is necessary for this program. This program is eligible for boh purchases AND refinances.
Fixed Rate Mortgages: Your rate and payment never change.
Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.
For Purchase transactions Conventional Loans require the home-buyer to put down at least 3%. If you have good credit and you can put down 5%, you may qualify for a loan with NO MONTHLY MORTGAGE INSURANCE. Call Tracy Flesch for details.
Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.
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