Staples Group Mortgage | St. George, Utah

Conventional Loans

Conventional Loans

A conventional loan is backed by either Fannie Mae or Freddie Mac, the two entities which comprise the Federal Housing Finance Agency (FHFA). Conventional loans account for more than half of all new mortgage loans. Residential properties of all types can be financed with conventional loans. Down payments typically range from 3% to 20% of the total purchase price. If the down payment is less than 20%, the loan will almost always require mortgage insurance. Mortgage insurance on conventional loans is typically less expensive than on other loan types! A conventional loan is for folks who have a larger down payment and excellent credit. 30-year, 25-year, 20-year, and even 15-year conventional loans are available. You can choose between a fixed-rate and an adjustable-rate mortgage loan. A fixed-rate mortgage’s interest rate never changes over the life of the loan, whereas an adjustable-rate mortgage’s rate might rise or fall depending on current interest rates.

Conforming and non-conforming conventional mortgages are two types of conventional mortgages. A conforming loan is one that meets the underwriting guidelines established by the government-sponsored enterprises Fannie Mae and Freddie Mac. A loan is termed non-conforming if it does not meet all of their requirements.

The most common way to determine whether you should do a conventional loan or jumbo mortgage is to be aware of the loan amounts. As of 2020, a mortgage with a loan amount below $510,400 is generally considered conforming, whereas any loan amount above $510,400 is considered nonconforming, better known as a Jumbo Mortgage. Conforming limits tend to vary depending on the area of the country. Jumbo Mortgages can sometimes have stricter requirements because they carry greater risk.

Key Conventional Mortgage Loan Points:

  • As low as 3% down on a primary residence purchase
  • Debt-to-income ratio as high as 45%
  • Qualifying guidelines more strict than FHA
  • Requires monthly mortgage insurance (MI) if down payment is less than 20%
  • MI can be canceled at 80% loan-to-value
  • Loan amount up to $510,400 as of 2020 (anything higher is a jumbo loan in most counties)

*Loan terms and limits subject to change. This page is meant for educational purposes is not a commitment to lend. To qualify for a conventional mortgage loan, please speak to one of our licensed loan officers or apply online.

Why We Chose a Conventional Loan

We have done a couple of mortgage with The Staples Group now because the experience has been very enjoyable. We had worked with another lender in our first home purchase and were pleasantly surprised at how low the Staple Group rates were just how much they communicated with us during the process! When spending so much money it was nice to always know what was going on. After doing an FHA loan for our first home purchase, we opted for a conventional mortgage in our most recent transaction because we were able to come up with 20% down and avoid mortgage insurance entirely! It feels great to not pay mortgage insurance anymore!

-The Glauser Family

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