A conventional mortgage is a type of home loan that is not insured or guaranteed by the government, unlike FHA, VA, or USDA mortgages. Instead, conventional mortgages are backed by private lenders, such as banks and mortgage companies, and conform to the guidelines set by Fannie Mae and Freddie Mac, the government-sponsored entities that buy and sell mortgages in the secondary market.
Conventional mortgages typically require a higher credit score and a larger down payment than government-backed loans, but they offer more flexibility in terms of loan amount, property type, and borrower qualifications. Conventional mortgages can be used to purchase primary residences, second homes, and investment properties, and are available in fixed-rate and adjustable-rate options.
In addition, conventional mortgages may require private mortgage insurance (PMI) if the down payment is less than 20% of the home’s value. PMI protects the lender in case the borrower defaults on the loan, but it adds an additional cost to the monthly mortgage payment.
Overall, conventional mortgages are a popular option for borrowers who have good credit, sufficient income, and a substantial down payment, and who are looking for a flexible, customizable home loan that meets their specific needs. Contact us at Valiant Mortgage today to get pre-approved for a conventional mortgage.