When you think of a 30 year fixed rate loan, you’re most likely thinking about a conventional loan. A conventional loan is one that “conforms” to Fannie Mae guidelines and has a loan amount of $417,000 or less for our area in and around Mooresville, NC. Here are a few “need to know” points on conventional loans.
TERMS TO CHOOSE FROM:
Fixed Rate: Your rate is fixed for the entire length of the loan.
• 30 year fixed
• 20 year fixed
• 15 year fixed
• 10 year fixed
YOUR DOWN PAYMENT OPTIONS
Conventional loans require a minimum of:
• 3% down payment for a primary residence (at least 1 borrower must be a first-time home owner)
• 5% down payment for a primary residence
• 10% for a second home
• 20% for an investment property
WHAT ABOUT MORTGAGE INSURANCE?
If you put less than 20% down on a conventional loan, it will require mortgage insurance. Mortgage insurance can be paid either monthly, all at once, or financed into the loan. In general, mortgage insurance costs increase as a borrower’s credit score decreases.