Conventional Loans

Looking for a Conventional Loan?

We want to help you secure a loan and find the perfect home for you.

The home buying and mortgage process can seem intimidating. 

Legal jargon, government programs with strange names, mounds of paperwork – it often just seems like it’s too much.

But it doesn’t have to be!

No matter your individual circumstances, the team at Right Trac Financial is here to help potential borrowers just like you find the right loan and move into the perfect home.

You can trust us to do right by you. We’ve been in business for more than 40 years and have helped thousands of home buyers navigate the mortgage process, move into the perfect home, and live happier lives.

Whether you hear it referred to as a “conventional mortgage” or a “conforming loan” – it means the same thing. What’s important is that we’ll help you secure the right mortgage and move into your own home. The bottom line is that if you need conventional financing (or any other kind of loan), we are here to help.

We’ll work with you to understand your needs and find you the financing that will get you and your family into the home of your dreams.

Eight to Thirty-Year Loans – and Everything in between!

Loans are available for as few as eight years and up to 30 years, and everything in between. While 15 and 30 year fixed interest mortgages are the most popular, we can work with you to find the best solution for you. We work with only the best conventional mortgage lenders and will find you the right loan option.

Contact us today at (800) 822-7482 to get started.

What are Conventional Mortgages?

With no shortage of terms and acronyms, the mortgage process can be confusing! If you are asking yourself what the conventional or conforming loan meaning is, you are not alone. But don’t despair, we are here to help you.

A conventional loan, also known as a conforming loan, simply means that the amount being borrowed is less than the limit set by Fannie Mae and Freddie Mac. For one unit homes in 2022 the conforming loan limit is $647,200 in the contiguous States, District of Columbia, and Puerto Rico and $970,800 in Alaska, Guam, Hawaii, and the U.S. Virgin Islands.

Conventional  / Conforming Loan Limits for 2022

Every October, Fannie Mae and Freddie Mac establish conforming loan limits on the home price. If the loan is for an amount less than the limit shown in the table below it is a conforming loan, if it is more it’s a non-conforming loan.

Maximum Conforming Loan Limits for 2022

Number of Units Contiguous States, District of Columbia, and Puerto Rico Alaska, Guam, Hawaii, and the U.S. Virgin Islands
1 $647,200 $970,800
2 $828,700 $1,243,050
3 $1,001,650 $1,502,475
4 $1,244,850 $1,867,275

You’ll notice that the max conforming loan amount in Alaska, Hawaii, Guam, and the Virgin Islands is 50 percent higher.

About Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac, who set the conventional loan limits, are publicly traded companies that are backed by the federal government. They assist the mortgage market by providing liquidity. Fannie Mae is officially the Federal National Mortgage Association (FNMA) while Freddie Mac is the Federal Home Loan Mortgage Corporation (FMCC).

Fannie and Freddie buy mortgage loans from lending institutions and secure them for resale to the investment community. Buying mortgage loans allows these agencies to provide a continuous flow of affordable funding to lenders like banks, which then reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming to repackage into the secondary market – effectively decreasing the demand for non-conforming loans.

Because Fannie and Freddie are backed by the Federal government, lenders are protected against borrower default – essentially its insurance for the lenders.

Non-Conforming Loan

In contrast to a conforming loan, a non-conforming loan simply means the amount being borrowed is higher than the limit set by Fannie and Freddie. Mortgages higher than the conforming limit are known as “Jumbo Loans” and are for more expensive homes.

If you are thinking about getting a loan that exceeds the limits for a conventional mortgage click here to learn more about Jumbo Loans >> or just give us a call. 

Conventional Loan Rates

Conventional loan interest rates are constantly changing and are influenced by many factors – that’s why using a mortgage broker like Right Trac Financial is so beneficial.

Our job is to get you the best possible rate on your loan, period.

We work with only the most qualified lenders and are dedicated to saving you as much money as possible. You won’t need to worry about what loan rates are today, tomorrow, or next week because we’ll find you the best possible interest rate or your loan.

Many finance professionals are expecting conventional mortgage rates to increase in the coming weeks and months, so locking in a rate soon can help you save a significant amount of money in the long term.

Contact us today to learn more about conventional loan rates and your options.

Conventional Loan Down Payment

One of the most important factors for borrowers to consider when deciding the loan type is the down payment required. The down payment is the money you bring to the table and give to the lender. It is due at closing. The down payment is determined as a percentage of the amount being borrowed. Because the lender will keep the down payment in the event of borrower default, it acts as a deterrent for the borrower to default as well as an incentive for the lender to lend.

Normally, the larger the down payment, the lower the monthly payment and lower the interest rate.

Five Percent Down Conventional Loan

For those who can afford it, a “5 down conventional loan” is often a good option because it usually means a lower monthly payment. While it can be a challenge to come up with the funds upfront, over the life of the loan it is usually a difference of thousands of dollars. We’ll work with you to explore your options and find the best down payment option for you. 

Three Percent Down – Conventional 97 Loan

If you are concerned about a large down payment to secure a conforming loan, don’t despair. You can get a conventional loan with as little as a three percent down payment. Mortgages with three percent down are sometimes referred to as a “97 loan” ‘ which simply refers to how much of the loan amount is outstanding when the loan is secured.

No Money Down Loan

In some cases you can buy a home with NO MONEY DOWN with mortgage options like a USDA loan or VA loan. Learn more about buying a house with no money down >>.

Conventional Loan Calculator

If you are eager to get some hard numbers, you can use this conventional home loan calculator to understand your situation.

Better yet, get in touch with us right now to find out more. We strive to offer dedicated service with the goal of helping you.

Types of Conventional Loans

We are eager to help you find the best mortgage for you, which may or may not be a conventional loan.

First-Time Home Buyer Conventional Loan

If you are in a financial situation that allows it, a conventional loan can be a good choice for first-time borrowers. Conventional loans usually come with a lower interest rate and lower monthly payments, which makes a huge over the lifetime of the loan. The flip side is that the down payment can be significantly higher.

But because of the financial situation of first-time homebuyers, who are usually younger and have less earning power, many opt for an FHA loan, which is specifically aimed at those buying a home for the first time.

Difference Between FHA and Conventional Loan

FHA loans are backed by the Federal Housing Administration, a branch of the Federal Government while conventional loans are backed by Fannie Mae and Freddie Mac, which are publicly traded companies (although they have a government guarantee). FHA loans are aimed at helping first-time homeowners and generally come with lower income and down payment requirements.

Although an FHA loan will be less than the conforming loan limit covered above, an FHA loan means they are backed by the Federal Housing Authority and are therefore not “conforming loans.” Basically, because FHA loans are aimed at folks that have a tighter financial situation, Fannie and Freddie are less keen to insure the mortgages against default, so the FHA does it. 

There are different circumstances, and the length of the loan (15- or 30-year) makes a big difference, but all things being equal: 

Conventional Loans:

  • Lower monthly payments
  • Lower interest rate
  • Higher down payment

FHA Loans:

  • Lower down payment
  • Higher monthly payments
  • Higher interest rate
  • Homeowners insurance required (PMI)

If you are a potential first-time homeowner, we want to help you find the best loan option for you. Get in touch with us today, or learn more about loans for first-time home buyers >>

Conventional Loan Refinance

Refinance your loan and save thousands of dollars

Refinancing your loan or consolidating your debt can help you lower your monthly payment and interest rate, and in many cases eliminate the insurance requirement (PMI). Over the years we’ve helped thousands of customers save thousands of dollars by refinancing their loans and consolidating their debt.

Stop wasting money by paying high-interest rates!

You work hard for your money – why flush it down the toilet by handing it over to banks at what can be exorbitant interest rates. Refinancing your loan or consolidating your debt can have an incredible positive impact on your day-to-day financial situation. 

If each month brings a sense of doom as you worry about making payments, we can make your life much easier! 

We are here to help you with your conventional loan refinance options, including a conventional streamline refinance.

Let Us Help You - We want to help you refinance your existing loan or consolidate your debt and potentially save you thousands of dollars.

Get in touch with us today for a no-obligation consultation to see if refinancing or debt consolidation is right for you. Or learn more about Refinancing your Mortgage >> or Consolidating your Debt >>.

“Cash Out” Refinancing

Refinancing your mortgage or consolidating your debt can also allow you to take “cash out,” which refers to borrowing additional funds that you can use to do things like pay down credit card or other high-interest debt, renovate your home, pay for college, or anything else!

Take Charge of Your Finances!

Large banks and multi-national credit card companies thrive on confusing consumers and locking them into what can be suffocating financial situations. We’re here to help you fight back! We love to help individuals struggling with their finances. Hearing the incredible stories from past customers gets us out of bed each morning.

Get in touch with us today and get your finances “On the Right Trac.”  

Refinance FHA to Conventional

As first-time homeowners age, increase their earnings and pay down mortgage principal, it’s often a good idea to refinance an FHA loan to a conventional loan. While FHA loans normally feature lower monthly payments, the total loan amount is higher than it would be with a conventional mortgage. By converting an FHA loan to a conventional loan, you can save thousands of dollars over the life of your loan.

We are here to help you refinance your FHA to a conventional loan – and save you real money.

Get in touch with us today!

Conventional Construction Loans – AKA Homestyle Loans

Given today’s tight housing market, many individuals and families are choosing to build their own home. We can help you secure a conventional loan to build a house. Conventional loans for home improvement are also referred to as Homestyle Loans and can be used for a variety of home improvement needs.

Depending on your situation and location, there are different building loan requirements, which we will help you understand and work through.

While you’ll often see banks advertising a conventional construction to permanent loan, that is often not in your best interest. Once the construction is done, what is often a better option is to secure a conventional loan to pay off the construction loan, lowering your interest rate and monthly payments significantly.

Get in touch with us now to learn more, or click here to learn more about construction loans >>.

Conventional Loan for Investment Property

Purchasing a property with a conventional loan can be a great investment. In most cases, you can buy an investment property to rent, and the monthly rental income is enough to not only cover the mortgage payment but put money in your pocket. It’s been proven time and time again that real estate is one of the most powerful ways to build real long-term wealth.

With interest rates set to rise, and the real estate market as tight as it is, now is a great time to purchase a property as an investment.

Looking for a Conventional Rehab Loan?

A “conventional homestyle loan” can give you more home for your money.

A conventional rehab or renovation loan allows you to secure funds to improve an existing home. In many cases, buying a distressed property can be a great way to make home-buying more affordable, and give you more “home for your money.” Potential homeowners are often afraid of purchasing a property that needs work, but that can be a huge missed opportunity. 

Use the situation to your advantage!

You can purchase a distressed home, secure a home improvement loan, have the repairs done, and end up with a home that is worth significantly more money. A rehabilitation or renovation loan that conforms to the limits established by Fannie Mae and Freddie Mac is called a “conventional homestyle loan.” And keep in mind, you don’t need a general contractor to secure a rehab loan!

Get in touch today or learn more about Home Improvement Loans >>

The bottom Line Is – We Are Here to Help You!

We are proud to offer “extraordinary mortgage solutions” and have helped thousands of ecstatic homeowners find the right loan and improve their lives.

Stop dreaming about a better living situation and get you and your family on “The Right Trac”

Read our customer testimonials>>

Learn more about Right Trac Financial >>

Don’t put off finding your dream home another day – contact us today!