Conventional Loans are home loans backed by a private, non-government entity and are made available through wholesale lenders and other mortgage companies, private banks, or credit unions. Our wholesale lenders often offer the best rates because they are backed by either Freddie Mac (FHLMC) or Fannie Mae (FNMA), and they meet the guidelines of the Federal Housing Finance Agency. This guarantees that the wholesale lender will be able to sell the loan on the secondary mortgage market.
In order to comply with FHFA guidelines, conventional loans are limited to $510,400 in most counties. They can have either fixed or adjustable rates, which means the interest on your loan is either fixed throughout the life of the loan or it is adjusted each year after a specified number of years.
Higher credit scores earn better rates but our lenders prefer to see a FICO credit score of 640 or higher.
Down payments for conventional mortgages generally range from 5% to 20% down, while first-time and other qualified borrowers can put as little as 3% down. It is important to note that conventional mortgages with a Loan-To-Value (LTV) ratio higher than 80% require mortgage insurance, which goes away once you have 20% equity in your home.
Loan product details are subject to change so be sure to check with your Sovereign Mortgage Investments LO for the latest information.