Conventional
Loan Programs
Conventional loans
are those that are not either insured nor guaranteed by the federal
government (such examples of government loans are FHA, VA or Farmers
Home loans.) Government loans have smaller maximum loan amounts, currently
$291,650 for FHA & Farmers Home, & $240,000 for VA.
Typically the
conventional loans are available with varying down payments from
as little as 3% or 5% depending on the particular program. A "Conforming"
loan is one which is below $451,050. If the loan amount goes above
that, it is considered a "JUMBO" loan and is subject to
higher interest rates, and stricter rules. The programs described
below are available as of this writing, June 2001 , for loan amounts
at or below $451,050.
The 30 year
fixed rate loan is the most common loan obtained. Your loan repayment
is based on a 30 year amortization. It carries with it, the highest
interest rate among all programs available, in return for stable
fixed monthly payments over the next 30 years.
The fixed rate
program is available for owner occupants, 2nd homes, and investors.
The minimum down payment is 5%, IF all borrowers will live in the
property being financed. However, condominiums are generally limited
to 10% down, and leasehold properties are generally require a 15%
down payment due to mortgage insurance guidelines. We have some
lenders, and mortgage insurance companies who make exceptions to
these general rules, so call us to find out if you meet the exceptions.
Investor loans typically require a 30% down payment, however we
have a couple lenders that will go with as low as a 10 to 20% down
payment, of course, their rates are higher.
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