CONVENTIONAL MORTGAGES

LEARN MORE ABOUT THESE POPULAR LOAN PROGRAMS

A Conventional Mortgage is a type of home loan. Unlike FHA, USDA, or VA, Conventional Loans are not backed by a government entity.

A Conforming Loan is the most common type of Conventional Mortgage. These home loans meet the financing standards set forth by Fannie Mae and Freddie Mac.

Conventional Mortgage Options

Conventional Home Loans offer many flexible programs. You can use a Conventional Mortgage to purchase your primary residence, a second home, and even an investment property. You can select a loan program with a fixed-rate or a variable-rate/adjustable-rate mortgage (ARM).

While many people select a 30-year loan term, you can also get a Conventional Loan in 10, 15, 20, 25, and 30-year terms. Some programs may also allow you to select a custom loan term.

Conventional Loans DO NOT require 20% down, however, a 20% down payment will allow you to bypass monthly private mortgage insurance (PMI).

 

Conventional Loan Benefits

  • Buyers with higher credit scores may have access to lower interest rates and lower PMI rates as compared to other home loan programs.
  • Down payments as low as 3%.*
  • You can remove PMI once you have 20% equity in your home.
  • Fixed and adjustable-rate mortgages.
  • Flexible loan terms.
  • Higher loan limits.
  • Programs for primary residence, second homes, vacation homes, and investment properties.

 

*Ask us about our 1% Down program!

IS A CONVENTIONAL MORTGAGE RIGHT FOR YOU?

At KTL, we recognize that each person’s situation is different. Your loan officer will fully review your loan application and will work with you to determine which loan program best fits your needs.

For some homebuyers, a conventional loan may be the best solution. For others, an FHA or USDA loan may provide lower upfront costs or a lower monthly payment.

We will provide you with all the available options so that you can make an educated, informed decision!

WHAT ARE FANNIE MAE AND FREDDIE MAC?

Fannie Mae and Freddie Mac are government-sponsored entities (GSEs). The U.S. Congress created them in 1938 and 1970 to provide stability and affordability in the mortgage market.

Fannie and Freddie do not originate or service mortgages. Instead, they buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities (MBS) that may be sold. Lenders use the cash raised by selling mortgages to Freddie and Fannie to continue to provide home loans to new customers.

When you obtain a Conforming Conventional Loan, it will be underwritten to the guidelines of either Fannie Mae or Freddie Mac. While these underwriting guidelines are very similar, in some situations, there may be differences between Fannie and Freddie.

Conforming Loan Limits

The Federal Housing Finance Agency (FHFA) determines Conforming Loan Limits for loans underwritten to Fannie Mae and Freddie Mac standards.

In 2024, the loan limits are as follows:

  • $766,550 –  1-unit home
  • $981,500 –  2-unit home
  • $1,186,350 – 3-unit home
  • $1,474,400 – 4-unit home

Certain high-cost areas have higher loan limits. Contact us for more information on your specific area.

Start Working Toward your Conventional Mortgage Today!

Ready to take the first steps toward homeownership? Want to see if a Conventional Mortgage is the best solution for you?

Start the process today! We’ll review your loan application and let you know what loan program offers you the most benefits for your scenario.

KTL Performance Mortgage provides home loans in Ohio, Indiana, Kentucky, and Florida. We are here to help you achieve your dreams of homeownership.

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