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A conventional mortgage is one that meets certain underwriting guidelines set forth by Fannie Mae and Freddie Mac. Conventional loans are attractive to borrowers because they usually offer lower interest rates.
Conventional Home Loans
The maximum size of a conventional loan is currently $484,350 for a single family residence. Since conventional loans are not government insured, they do not require any upfront mortgage insurance and do not require monthly mortgage insurance if the down payment is 20% or greater. At the end of the 2014 year, the minimum down payment for Fannie Mae conventional loans was reduced to 3% giving first time homebuyers a great opportunity for homeownership.
Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announce new loan limits every year.
For every county and county-equivalent in the country, maximum loan limits for mortgages can be found at: Federal Housing Finance Agency (FHFA)
Find out how you can take advantage of a conventional loan and reduce your monthly mortgage payments. Contact Mid-Island Mortgage today!