CONVENTIONAL LOANS

What is a Conventional Loan?

Conventional loans are any mortgage that is not guaranteed or insured by the federal government. Although a conventional loan is not insured or guaranteed by the government, it still follows the guidelines of government sponsored enterprises, Fannie Mae and Freddie Mac.

Conventional loans may be “conforming” and “non-conforming”. Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac. These guidelines put the maximum purchase amount for a first mortgage at $417,000 (may be higher, subject to county loan limits) for a single-family dwelling. If the purchsase is for a property that is either a two-family, three-family, or four-family dwelling, larger values apply before the loan is no longer considered a conventional loan.

NEXA Mortgage, LLC offers conventional fixed rate loans, adjustable rate loans and interest only loans:

Fixed Rate

Conventional loans are any mortgage that is not guaranteed or insured by the federal government. Although a conventional loan is not insured or guaranteed by the government, it still follows the guidelines of government sponsored enterprises, Fannie Mae and Freddie Mac.

Conventional loans may be “conforming” and “non-conforming”. Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac. These guidelines put the maximum purchase amount for a first mortgage at $417,000 (may be higher, subject to county loan limits) for a single-family dwelling. If the purchsase is for a property that is either a two-family, three-family, or four-family dwelling, larger values apply before the loan is no longer considered a conventional loan.

Adjustable Rate

With an adjustable rate loan, your rate will adjust and your payments will fluctuate based on changes in the market. However, the rate and payment remains unchanged during the introductory period which could be 3, 5 or 7 years. The initial rate for an adjustable rate mortgage is usually lower than that of a fixed rate loan. After the introductory period expires, the interest rate is subject to adjust at predetermined periods, usually every six months. The rate adjustments are based on market interest rates and the adjustment caps limit how much your interest can adjust in a specified period of time. An adjustable rate mortgage is a great choice if you don’t plan to own the home for a long period of time.

Interest Only

With an interest only loan, you only pay the interest on the principal balance of the loan for a set period of time (i.e. 5-years or 10-years) with the principal balance remaining unchanged for that period of time. Once the interest only period is up, the principal balance of the loan is then amortized for the remaining term of the loan (i.e. 20-years or 25-years). An interest only loan is a good choice if you are looking for more flexibility as your initial payments will be less for the first 5 or 10 years.

The Details are Important

Loan to value ratios are often overlooked by homebuyers. For most, the interest rate and loan term are the more important items. However, the loan to value ratio is a key factor in your application. Loan to value ratios vary depending on the type of property you are looking to purchase.

If your purchase is for a property that is a two-family, three-family or a four-family residence, please call Nexa Home Mortgage to receive the maximum loan to value ratios.

Please reach out to me with any questions. My goal is to make this a 5-star experience for you!

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Tibor Benke

Loan Officer NMLS #1904878

NMLS#    1904878
Cell          754-707-2733
Email       tbenke@nexamortgage.com

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NEXA Mortgage LLC.

www.nexamortgage.com

NMLS #1660690

AZMB #0944059

An Equal Housing Lender All Rights Reserved. © 2020

Contact Us

2450 S. Gilbert Rd. Suite 210 Chandler, AZ 85286

Phone: 754-707-2733

tbenke@nexamortgage.com

This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2020 | NEXA Mortgage LLC.
Licensed In: FL, NMLS # 1904878 | NMLS ID 1660690 | AZMB #0944059
Corporate Address : 2450 S. Gilbert Rd. Suite 210 Chandler, AZ 85286

Tibor Services all of Florida

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