Fixed Rate/Amortized conventional loan is a mortgage in which the same principal and interest payment is paid every month, from the beginning of the loan to the end of the loan. Two important factors are the term of the loan and the loan-to-value ratio. The LTV can be lower than 80%. If the LTV is higher than 80%, lenders require that borrowers pay for private mortgage insurance. The term of the loan can be longer or shorter, depending on the borrower's qualifications.

Adjustable-rate conventional loan means the loan is adjustable, it can fluctuate.  The three popular types of adjustable conventional loans are:

 3 / 1 ARM. This loan is fixed for 3 years, and then it begins to adjust for the remaining 27 years; 5 /1 ARM. This loan is fixed for 5 years, and then it begins to adjust for the remaining 25 years; 7 / 1 ARM. This loan is fixed for 7 years, and then it begins to adjust for the remaining 23 years.

While Conventional Mortgage Guidelines allow you to purchase warrantable condos, planned unit developments, modular homes, manufactured homes, and 1-4 family residences, conventional Loans can also be used to finance primary residences, second homes and investment property.
 

Down-Payment Requirements:  5% - 20% of the sales price in cash for the down payment and closing costs.

Basic Requirements:  Your income and your monthly expenses. Standard debt-to-income ratios are 28/36 for Conventional Loans. These ratios may be exceeded with compensation factors.  Your credit history - A FICO score of 620 or above is very helpful in obtaining an approval.

Always 'shop around' for the best loan and lender to fit your short and long term needs!

Next Financing Options topics: VA Loan Program 

Know your buying and selling financial options!