A conventional mortgage is a plain-vanilla home loan that’s ideal for borrowers with good or excellent credit. These can carry a fixed rate or carry an adjustable rate. They are offered through private banks and are not backed by government agencies such as the Federal Housing Administration and the Department of Veterans Affairs.
Fixed Rate Mortgages (FRM)
The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime.
Adjustable Rate Mortgages (ARM)
Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting.
Fannie Mae and Freddie Mac
Finding an affordable mortgage that works within your budget might not be as hard as you think. Today’s homebuyers and refinancers have many options to help them buy as well as maintain a home. Some of these options address needs like:
The key is to do some research and then find a mortgage professional who can help you decide on the best loan for your financial situation. Get started by considering these affordable mortgage options.