What are Conventional Loans?
To make it simple, conventional Florida mortgage lenders provide mortgage loans that are or are not backed by government agencies, such as the Federal Housing Administration (FHA) and VA. However, they comply with strict eligibility guidelines set by Fannie Mae and Freddie Mac.
Both of these are government-sponsored enterprises that play a crucial role in the U.S. housing market by buying mortgages from Florida lenders, packaging them into securities, and selling them to investors, thus providing liquidity, stability, and affordability to the mortgage market.
For borrowers with better credit scores, these conventional loans have slightly better interest rates and terms compared to other Florida mortgage loan programs. For conventional loans, the down payments can be as low as 3% or as high as approximately 20% and the repayment could be up to 30 years.
What Are the Qualifications for a Conventional Loan?
You need a minimum 620 credit score and sufficient funds to cover down payment and closing costs. By working with the best Florida mortgage lenders, we offer conventional loans that can help you find a loan with a down payment as little as 3%. Seller-paid closing costs on conventional mortgage loans depend on your down payment. With 10% down you can request up to 3% from the seller as outlined below.
Occupancy Type | LTV/CLTV Ratio | Maximum IPC |
---|---|---|
Principal residence or second home | Greater than 90% | 3%1 |
75.01% – 90% | 6% | |
75% or less | 9% | |
Investment property | All CLTV ratios | 2% |
Am I Qualified for a Conventional Loan?
The terms and fee of securing a conventional loan depend on various factors. The borrower’s profile, credit score, the property in question, the down payment, and the lender all impact eligibility.
To get approved for a conventional loan in Fort Lauderdale, you need to meet the following requirements:
What are Fixed Rate Conventional Loans?
Fixed-rate loans are a type of conventional loans. They are fully amortized loans that have a fixed interest rate. This means that the rate will not rise or fall over the term your mortgage lasts.
Understandably, these are the most commonly applied for. They offer borrowers more security as the mortgage payments won’t change over time. These loans are amortized over a period of 15, 20 or 30 years.