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Conventional Loans

A conventional home loan is not formally backed by any government entity such as FHA or VA. A conventional home loan is a loan that follows guidelines established by Fannie Mac and Freddie Mae, the two government agencies that help standardize mortgage lending in the United States. Conventional home loans are also known as conforming loans or conforming mortgage because they “conform” to Fannie Mae and Freddie Mac loan underwriting standards.

It’s not true that you need a 20% down payment for a conventional home loan. You can put down as little as 3% to 5%.

What are the conventional mortgage advantages?

You have an option on how long you will be paying your conventional mortgage. Conventional home loans come in 15, 20, 25, and thirty-year terms.

Our “flex loan” programs allow to select any payment terms you want …. 29 years, 26 years, 23 years, 18 years, etc.

The shorter your loan payment term, the higher your monthly payments. Fortunately, a loan term of 30 years still comes with low fixed interest rates that helps home buyers budget their costs of home ownership. Conventional home loans are also a smart choice for those who know they won’t remain in their house a long time and want a shorter-term, adjustable-rate mortgage. This option comes with a lower interest rate than a fixed-rate loan.

Another advantage to conventional loans is the lack of an upfront mortgage insurance premiums (called “MIP”), even if the buyer puts less than 20% down, which is not the case with FHA and VA Loans. FHA and VA mortgages require an upfront “mortgage insurance premium” usually between 1% and 3% of the loan amount.

Conventional loans only require a monthly mortgage insurance fee (a.k.a. Private Mortgage Insurance or PMI), and only when the homeowner puts down less than 20 percent. Plus, that mortgage insurance cost is often lower than that of government-backed loans.

Conventional loan limits for Adams, Arapahoe, Broomfield, Denver, Douglas, and Jefferson Counties are $575,000. Boulder County is $644,000. Weld, El Paso, and Larimer County is $510,400.

Conventional Loan Criteria Highlights

  • Requires only 640 credit score,
  • Flex Loan Terms Available from 8 to 30 Years,
  • Down Payment can be a gift from family or employer,
  • Competitive rates and low closing costs,
  • No up-front mortgage insurance like FHA and VA requires,
  • Does not require taxes and/or insurance to be escrowed, and
  • No Closing Costs Option Available.