By far the most common mortgage option, a conventional loan is a type of mortgage that is not backed by a government program but is instead available through alternative mortgage companies. Conventional loans gained popularity by offering lower interest rates than other loan programs and providing the option for fixed term loans, which results in lower monthly payments that will remain steady month to month. These loans are also flexible and offer down payment options that often range from 3 to 20 percent. Borrowers who put down 20 percent or more will not have to pay private mortgage insurance (PMI).
Conventional loans are a common choice for homebuyers who have a high credit score, earn a steady income, and can put down a sizeable down payment, but there are some exceptions or ways to improve your candidacy if you do not meet the requirements. At Coastal Custom Mortgage, we work with a variety of clients to help them achieve their financial goals, so whether you are interested in applying for a conventional loan or need advice on the right program for you, feel free to contact us today.