Conventional Loans

What are Conventional Loans?

Conventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by Fannie Mae or Freddie Mac. Typically, conventional loans have better rates, terms and/or lower fees than other types of loans. However, conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 5-20% and reliable monthly income. Conventional loans are ideal for borrowers with excellent credit and at least a 5% down payment.

Conventional LoansMost Common Types of Conventional Loans

Fixed Rate Mortgages: Your rate and payment never change.

  • 30 Year Fixed Loan
    Benefits: Lowest fixed monthly payments
  • 20 Year Fixed Loan
    Benefits: Low fixed monthly payments
  • 15 Year Fixed Loan
    Benefits: Lower rate than the 15 or 20 Year Fixed; Pay less interest and pay your home off more quickly.
  • 10 Year Fixed Loan
    Benefits: Lower rate; Pay off your loan and build equity faster.
  • 5 Year Fixed Loan
    Benefits: Lowest rate; Pay off your loan and build equity the fastest

Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.

  • 3/1 ARM
    Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
  • 5/1 ARM
    Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
  • 7/1 ARM
    Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years

What are the Conventional Down Payment Requirements?

For Purchase transactions Conventional Loans require the home-buyer to put down at least 5% - 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property. If you don't have enough equity to qualify for a conventional refinance - even if you owe more than your home is worth - you might be eligible for a HARP 2.0 Loan.

What types of property are eligible?

Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.

Find Out if a Conventional Loan is Right for You

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Chuck Toland (NMLS# 225744)

Phone: 708-671-5400 | Fax: 775-890-6757

Pacor Mortgage Corp. (NMLS# 261297)
7300 College Drive, Suite 201
Palos Heights, Illinois 60463
Illinois License/Registration #: 031.0004447
Illinois Mortgage Licensee and Equal Housing Lender

2017 Pacor Mortgage Corp.

Loan inquiries and applications in states where I am not licensed will be referred to a Pacor Loan Officer who is licensed in the property state. Pacor Mortgage Corp. is located at 14930 S. Cicero, Oak Forest, IL 60452, Phone 773-881-7744 (NMLS #120945). Pacor Mortgage Corp. is an Illinois Residential Mortgage Licensee #MB.0000892 (IDFPR, 100 W. Randolph Street, 9th FL, Chicago, IL 60601, ph #888-473-4858). Pacor Mortgage Corp holds additional licenses in the following states: FL #MLD1075; IN #DFI13177; NJ #1123035, Licensed by the N.J. Department of Banking and Insurance (New Jersey Administrative Code §3:2-1.4(b)(6)); OH #MB.804151.000 dba US Lending Corporation; PA #43855; WI #120945BA; MI #FL0828, MI #SR1130.This is not an offer for an extension of credit. Any of the advertised products may be discontinued at any time. Information and pricing are subject to change at any time and without notice. Pacor Mortgage Corp. is not affiliated with your current lender, nor is it an agency or extension of the Federal Government, Fannie Mae, Freddie Mac or HUD.

 

Disclaimer updated January 2017 Equal Housing Lender