Conventional Loans

Oct 22, 2022
Mortgage Guide

Introduction to Conventional Loans

Chicago Mortgage Funding, a trusted leader in the business and consumer services industry under the category of real estate, is pleased to offer you comprehensive information on conventional loans. We understand the importance of finding the right mortgage solution for your real estate needs, and our team of experts is here to guide you through the process.

What are Conventional Loans?

Conventional loans are mortgage products that are not guaranteed or insured by any government entity such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Unlike FHA or VA loans, conventional loans are typically funded and serviced by private institutions, offering a range of competitive options for borrowers.

The Benefits of Conventional Loans

Conventional loans offer numerous advantages for homebuyers and real estate investors. Some key benefits include:

  • Flexible Loan Amounts: Conventional loans provide flexibility in terms of loan amounts, allowing borrowers to finance properties of various values.
  • Lower Costs: Compared to government-backed loans, conventional loans often have lower interest rates and reduced mortgage insurance premiums.
  • No Upfront Mortgage Insurance: With conventional loans, there is typically no requirement for upfront mortgage insurance premiums, which can save borrowers significant costs.
  • Mortgage Insurance Options: Borrowers with less than 20% down payment can choose between private mortgage insurance (PMI) or lender-paid mortgage insurance (LPMI) options depending on their financial situation.
  • Fast Processing Times: Conventional loans generally have faster processing times, allowing borrowers to close on their real estate transactions more quickly.

Types of Conventional Loans

Within the realm of conventional loans, there are various types that cater to specific needs. Some popular types include:

  1. Fixed-Rate Conventional Loans: These loans offer a stable interest rate and predictable monthly payments over the life of the loan, providing peace of mind and budgeting certainty.
  2. Adjustable-Rate Conventional Loans: Also known as ARMs, these loans have a fixed interest rate for an initial period and then adjust periodically based on market conditions. ARMs can be a suitable option for borrowers who plan to sell or refinance their properties within a specific time frame.
  3. Jumbo Conventional Loans: Jumbo loans are conventional loans that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. These loans are ideal for high-value properties or borrowers requiring higher loan amounts.

How to Qualify for a Conventional Loan

While qualification requirements may vary based on lenders and loan programs, several common factors influence eligibility for conventional loans:

  • Credit Score: Lenders typically require a solid credit score, ideally above 620, to secure a conventional loan. A higher credit score may help borrowers access more favorable terms and interest rates.
  • Income and Employment: Demonstrating stable employment and income helps lenders assess your ability to repay the loan. Providing necessary documentation of income is crucial during the loan application process.
  • Down Payment: Conventional loans often require a down payment, typically ranging from 3% to 20% of the purchase price. The higher the down payment, the better the terms and interest rates borrowers can obtain.
  • Debt-to-Income Ratio: Lenders evaluate the ratio between your monthly debt obligations and your gross monthly income. A lower debt-to-income ratio demonstrates financial stability and increases the likelihood of loan approval.

Why Choose Chicago Mortgage Funding for Conventional Loans?

At Chicago Mortgage Funding, we pride ourselves on delivering exceptional mortgage solutions tailored to your specific needs. Here's why you should choose us:

  • Expertise and Experience: With years of experience in the real estate industry, our team possesses extensive knowledge of conventional loans, enabling us to provide sound advice and guidance throughout the process.
  • Personalized Service: We understand that each borrower has unique circumstances. We take the time to understand your goals and financial situation, customizing loan options that align with your objectives.
  • Competitive Rates: As a trusted mortgage provider, we strive to offer competitive interest rates, helping you save on your monthly payments over the life of your loan.
  • Streamlined Process: Our efficient and streamlined loan application and processing system ensure faster turnarounds, providing you with a smooth and hassle-free experience.
  • Guidance Every Step of the Way: From pre-qualification to closing, our dedicated team of professionals will be by your side, addressing any concerns and keeping you informed at every stage of the loan process.

Contact Chicago Mortgage Funding Today

Ready to explore the possibilities of conventional loans? Contact Chicago Mortgage Funding today to speak with one of our knowledgeable team members. We're here to help you achieve your real estate goals and guide you through the process with expertise and personalized service.

Matthew Poindexter
Great resource for homebuyers!
Nov 11, 2023