978-309-3109
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978-309-3109

Matthew Rasetta

NMLS ID 90621

978-309-3109 bfinnemore@srmortgagene.com

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.

Conventional LoansMost 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.
  • 5 Year Fixed Loan
    Benefits: Lowest rate; Pay off your loan and build equity the fastest

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

  • 3/1 ARM
    Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
  • 5/1 ARM
    Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
  • 7/1 ARM
    Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years

What are the Conventional Down Payment Requirements?

For Purchase transactions, a conventional loan down payment usually requires the home-buyer to pay at least 5% - 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property. If you don't have enough equity to qualify for a conventional refinance - even if you owe more than your home is worth - you might be eligible for a HARP 2.0 Loan.

What types of property are eligible?

Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home and investment property.

Find Out if a Conventional Loan is Right for You

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