Qualifying for a Get Money Today With Cash Loans Bear in St Charles, MD 20603 on an investment property can be difficult for several investors, considering the rules and regulations required to meet, financial concerns for a down payment or credit ratings to qualify for a particular loan, so as you continue on in this article find out the difference and breakdown of conventional and non-conventional loans to give you a better sense of what to expect as you apply for a home loan.
Conventional loans are any mortgage loan that is not guaranteed or insured by the federal government however they are considered to be mortgage loans that follow the guidelines of government sponsored enterprises (GSE), such as Fannie Mae or Freddie Mac. The conventional loans are then broken down into conforming or non-conforming loans.
Conforming loans follow terms and conditions set by Fannie Mae and Freddie Mac.
Non-Conforming loans do not meet the requirements of Fannie Mae or Freddie Mac, but still considered conventional loans.
The conventional loan is typically recommended if the investor is unsure of their credit score or not financially stable to make a significant down payment. This loan is ideal for investors who need flexible payment options or looking to receive low closing costs.
Requirements of a Conventional Home – The home buyer must invest in at least 5% -20% of the sale price in cash for the down payment and closing costs. For example, if the sale price is $100,000 the home buyer is required to invest in at least $5,000 – $20,000.
Eligibility – This loan can be used to finance primary residences, second homes and investment properties, along with capabilities to purchase warrantable condos, planned unit developments, modular homes, family residence of 1-4 and manufactured homes.
Conventional Programs Offer the Following Loans –
Fixed rate loans – Most often Conventional Mortgages are fixed-rate mortgages and typically your interest rate will remain the same during the entire loan period. Of course in a fixed rate Conventional Mortgage you will always know the exact amount on your monthly payment and how many payments remain.
Adjustable rate loans – The initial interest rates and monthly payments for an adjustable rate mortgage (ARM) are relatively low, but can change throughout the life of that loan.
The non-conventional loans are just the opposite of conventional loans, as there can be several surprises appearing not to mention taking into consideration the adjustable rate mortgage (ARM) on this type of loan. The surprises of non-conventional loans are particularly directed towards those who are under in their mortgage. If you are considered to be one of those homeowners underwater in your mortgage find out if you’re required to any of the following: