A private sector loan is one that is not guaranteed nor insured by the U.S. government such as FHA or VA. Typically, conventional loans have fixed terms and rates. These mortgages adhere to Fannie Mae or Freddie Mac guidelines.
Conventional loans usually require at least 5% down payment to purchase a home. However, for any conventional loan with less than 20% down you will be subject to Mortgage Insurance on the loan. There are a couple of ways that the mortgage insurance can be paid. It can be a monthly charge on the loan or you can pay it in a lump sum upfront. The upfront lump sum can be a great option if you are purchasing a home and the seller is paying for your closing costs.
If you have money for a down payment and can put down at least 5%, a conventional loan can be one of the most affordable mortgage choices.
Want to lower your mortgage rate?
If you have equity in your home and are looking to refinance, a conventional loan can be a great option. With reduced fees and great rates, you could save thousands over the life of your loan.
Call us today or apply online via the link below to see if this is the right loan program for you.