Conventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but are secured by a private lender.
So what are the differences between a government insured loan and a conventional?
A conventional loan simply means that it is conforming to Fannie Mae and Freddie Mac guidelines. Fannie Mae and Freddie are government-sponsored enterprises that purchase mortgages from lenders and sells them to investors. Because the loans are not insured by the government the credit guidelines are strictor, requiring a minimum credit score of 620 and your debt to income ratio around 45%. If you are wanting some wiggle room in the amount of house you can purchase then you may want to consider going with FHA. Both programs can be a great way to purchase your home.
We want you to be confident that you are getting the best loan tailored for your specific needs and goals. The only way to achieve that is by going over your options with one of our professional home loan experts.
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