A conventional home loan is a mortgage that is not insured by the federal government that usually offer lower rates and better flexibility. They’re popular with borrowers that have a good credit score, a stable job with steady income, who can afford a down payment, and people who are financially stable overall.
Advantages of conventional loans from Midwest BankCentre include:
- Simple application process
- Many options to choose from with flexible terms making it easier to match your current situation and goals
- Available for almost all types of properties, from single- and multi-family homes to condominiums and manufactured homes.
- If you have at least 20% to put down on a purchase, or at least 20% equity when refinancing, you are not required to pay mortgage insurance.
- Conventional loans offer lower interest rates for borrowers with good credit.
- Fixed-rate loans have an interest rate that does not change for the life of the loan and protects you against rising rates. You have the option of selecting a 10, 15, 20, 25 and 30-year term.
- ARM loans have an up-front fixed rate period longer than one year, typically between 5 and 10 years. During this time, the interest rate and monthly payments are even lower than a fixed-rate mortgage. However, after the initial period, your rate can change or adjust, usually higher, along with your monthly payments. Adjustable rates are ideal for people who don’t plan on staying in their home past the time when the interest rate will change, usually after 5-, 7- or 10-year terms.