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For Borrowers

By definition a conventional loan simply means it is sold to Fannie Mae or Freddie Mac.

Conventional loans come in fixed rate terms (5 year increments) ranging from 10 years to 30 years. Conventional loans can also have rates that are fixed for a short term period ranging from 3 years to 10 years in length. After this time they adjust.

Many borrowers when researching the best loan will compare a conventional loan with FHA. Here is a quick chart with the differences. While not always the case, more often than not conventional loans cost less over time when compared to FHA.

Conventional

  • Mortgage insurance may be required.
  • Minimum 5% down
  • Primary, Secondary or Investment Residence.
  • Allows borrowers a 49.99% debt to income ratio.
  • Maximum Loan Amount $453,100

FHA

  • Mortgage insurance. Always required. Always remains on the loan.
  • Minimum 3.5% Down
  • Only for Primary Residence.
  • Allows borrowers a 56.99% debt to income ratio.
  • Maximum Loan Amount $294,515

Additional Borrower Information

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