Conventional Loans Offer Great Possibilities
When it comes to choosing what type of mortgage will best suit your lifestyle, you have many choices available. At Cal Tech Mortgage, we listen to our clients’ unique needs and carefully evaluate their financial past, present and future as it relates to loan approval. We know that by connecting each client with the best fit for a loan, we will gain clients for life. Conventional loans are one of the most popular mortgage options available today. Even though conventional loans are a specific type of mortgage, they come in all shapes and sizes. If you are looking for a home in Irvine, Lake Forest, Mission Viejo or surrounding California, contact Cal Tech Mortgage. We can help you compare rates among conventional mortgages and non-conventional options to find the best-suited loan.
The Basics of a Conventional Loan
A conventional loan is one that is not insured through a federal agency. That is, unlike FHA (Federal Housing Administration) and VA (Department of Veterans Affairs) loans, conventional loans are not regulated by or secured through the government. Because of this, approval for conventional loans is open to fewer people than FHA and VA loans. Conventional loans can, however, have better interest rates and more flexible terms in many cases than government-insured loans.
Conforming or Nonconforming Conventional Loans
Our certified mortgage brokers can help clients with two types of conventional loans: conforming and nonconforming. Conforming loans are called such because they “conform” to regulations set forth by Fannie Mae and Freddie Mac, two giant lending organizations. Conforming loans have loan limits less than $424,100 in most areas.
Nonconforming loans are those that meet or exceed $424,100. These are known often as “jumbo mortgages,” because they are for more expensive homes. Jumbo conventional loans typically require a substantial down payment of at least 20% and have more intensive income and credit requirements.
Fixed- or Adjustable-Rate Conventional Loans
“Fixed-rate” and “adjustable-rate” conventional loans differ in monthly payments, due in part to different interest rates.
Adjustable-rate mortgages are available with different terms, in which the loan is fixed for part of the term, then adjusts for the remainder. This might be a good option if your income may increase in the near future, as it keeps payments loans for the initial period. Fixed-rate loans are easy to plan around. Rates and monthly premiums stay stable for the term of the loan.
Qualifying for a Conventional Loan
Conventional loans are a great option to consider if:
- You can put down at least 10-20% down payment
- You have good to excellent credit
- You have proof of stable employment
- You are looking for flexible term options for your mortgage
Get Started Today
If you are beginning the process of looking for and purchasing a home, contact Cal Tech Mortgage today. Our certified brokers work with qualified lenders who are ready to approve conventional loans. We can help you find the right rates to finance your home in Irvine, Lake Forest, Mission Viejo or surrounding communities.