Conventional Loans

What are Conventional Loans?

Conventional loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by Fannie Mae or Freddie Mac. Typically, conventional loans have better rates, terms and/or lower fees than other types of loans. However, conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 5-20% and reliable monthly income. Conventional loans are ideal for borrowers with excellent credit and at least a 5% down payment.

Buying a home using a conventional mortgage can take up to a few weeks for the whole process. At first, you’ll start by filling out an application. If you work with a conventional loan officer from Superior Rate Mortgage of New England, you’ll get the benefit of our experience and access to multiple loan programs. This lets you shop the lowest conventional loan rates and get the best mortgage for your needs. We are licensed to work with borrowers in Massachusetts, Rhode Island, New Hampshire and Connecticut.

If you meet the initial requirements for conventional mortgage loans in Massachusetts or a neighboring state, we’ll show you tailored options for conventional mortgage rates and other terms. You can use this information to help you determine how much you might get in a loan.

If you agree to the terms and are ready to buy a specific property, we can start the underwriting process, which is a detailed look at your finances and the transaction. This may take a few days or longer, depending on the information we need. Once every box is checked, we can set a date to close on the loan.

Most Common Types of Conventional Loans

Fixed Rate Mortgages: Your rate and payment never change.

• 30 Year Fixed Loan
       Benefits: Lowest fixed monthly payments
• 20 Year Fixed Loan
      Benefits: Low fixed monthly payments
• 15 Year Fixed Loan
      Benefits: Lower rate than the 30 or 20 Year Fixed Loans; Pay less interest and pay your home off more quickly.
• 10 Year Fixed Loan
     Benefits: Lower rate; Pay off your loan and build equity faster.

Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.

• 3/6 ARM
      Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
• 5/6 ARM
     Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
• 7/6 ARM
    Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years
• 10/6 ARM                                                                                                                                                                                                                                                                                                            Fixed Rate for 10 Years, Adjustable Rate for the remaining 20 years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                For more information call Abdi Mohammadian 925-785-7851.