A conventional mortgage loan, also known as a conforming loan, is a mortgage that falls within the guidelines of Government Sponsored Enterprises like Freddie Mac and Fannie Mae. The most common component of those guidelines is the actual size of the loan, which is now limited to loans under $424,100 for a single-family home.
There are two types of conventional mortgage loans: fixed rate loans and adjustable rate loans.
A conventional/conforming fixed-rate mortgage is a home loan with a monthly payment that stays the same throughout the term of the loan.
A conventional/conforming adjustable-rate mortgage (ARM) is a home loan where the rate is locked for period of time (between 3 and 10 years). It then fluctuates with the market when the term is up. An ARM loan is a 30-year loan that will adjust every 12 months after the initial locked term expires. The benefit of an ARM is that you will end up with a lower monthly payment as compared to the fixed-rate mortgage for a period of time.
While buying a home is exciting, securing the right loan or trying to find the lowest mortgage rates is not. At Mortgage Solutions of St. Louis, our experienced conventional mortgage loan lenders want to make sure buying or refinancing your home is a positive experience. We eliminate the stress by offering friendly advice to help you decide which conventional mortgage type is right for you.
Get in touch today by giving us a call at 314-963-9648.
Webster Groves, MO
St Genevieve School