Conventional loans are mortgage loans offered by government sponsored lenders. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate. Gold Star Mortgage Financial Group – Christopher Chaffin offers conventional mortgages in Ann Arbor, as well as all of Michigan.
What is a Conventional Loan?
While many think that a 20% down payment is required for all conventional loans, many lenders now offer low down payment options. Typically the minimum down payment on a conventional loan is 5% however first time home buyers with qualified credit can get approved with as little as 3% down. A first time homebuyer is defined as someone who has not owned a home in the last three years. Borrowers can also qualify for 3% down with Fannie Mae’s Home Affordable program or Freddie Mac’s Home possible. Both of these programs have household income limits equal to median incomes in there respective counties.
Benefits of Conventional Loans
Conventional loans are intended for borrowers with mid to high credit scores, and have good rates and flexibility.
Here are some examples of where a conventional loan may apply to you:
Your property has increased in value, your currently in an FHA or conventional loan with mortgage insurance and you are eligible to refinance to a conventional loan with no mortgage insurance. By lowering your payment you can create more monthly cash flow.
You have between 3% and 20% down with decent credit and you’d like to buy a house. Home ownership is one of the top ways to create wealth in America.
You need to consolidate some debt, you can take up to 80% of your home’s value to pay off debts. By consolidated debt you can save more money for retirement faster or pay off your house faster.
You’d simply like to lower your term and get your house paid off faster. We can do 10, 15, and 20 year terms as well as 30.
Conventional Loan Limits
Different counties have different limits on how much you can borrow for a Conventional Loan.
For most counties in Michigan and Florida the loan limit is $726,200.00 for 2023.
Get Pre-Approved for a Conventional Loan
If you are looking to purchase a home in Michigan or Florida simply fill out the form on this page and a licensed expert will contact you.