Conventional Loans

Conventional loans are mortgage loans offered by non-government sponsored lenders. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate. Anderson American Mortgage and Real Estate Network offers conventional mortgages in El Cajon, as well as all of California. We have the ability to rank over 100 lenders daily to ensure best rate, service and products available in todays market. Apply today to get pre-qualified or a full pre-approval and start shopping for your new home.

What is a Conventional Loan?

While many think that a 20% down payment is required for all conventional loans, many lenders now offer low down payment options. Starting at 3% down, you can now obtain a conventional loan for your home purchase. A conventional mortgage refers to a loan that is not insured or guaranteed by the federal government. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate.

Conforming vs. Non-Conforming Loans

Conventional loans are split into two types: conforming and non-conforming. Conforming loans are different than nonconforming loans in that they have terms and conditions that meet certain guidelines established by Fannie Mae and Freddie Mac. One of the most basic requirements that a loan must meet to become a conforming loan is that it must fall under a certain loan amount.

Benefits of Conventional Loans

Conventional loans are intended for borrowers with better income and credit scores, and have good rates and flexibility. Conventional mortgage can save cash. Home mortgage borrowers with good credit and the funds for a larger down payment may be better served by a conventional loan than an FHA-insured loan. FHA-insured loans are enticing because they have low down payment requirements. But conventional loans also have advantages.

Conventional Loan Limits

Different counties have different limits on how much you can borrow for a Conventional Loan. The first big difference between a conforming and a nonconforming loan is the loan’s limits. Jumbo loans have higher loan limits, and slightly different guidelines because the mortgage can’t be sold to Fannie Mae, Freddie Mac, FHA and VA and pushes into nonconforming territory. The Federal Housing Finance Agency (FHFA) announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2018. In most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017. Above that amount, the loan would be considered High Balance or Jumbo, depending on the County the property is in.

Get Pre-Approved for a Conventional Loan

If you are looking to purchase a home in El Cajon, or anywhere in California, contact Anderson American Mortgage and Real Estate Network at (619) 654-3995 for more information, or simply fill out the form on this page.