Fixed Rate Conventional Loans
A 30 year fixed conventional loan is a loan that has the same mortgage payments for 360 months. A 30-year fixed loan is the most popular loan choice for most mortgage customers because of its security and locked interest rate.
Conventional loans are typically harder to qualify for and require a slightly higher down payment. However, in some cases, rates can be lower and have lower closing costs. Also, monthly mortgage insurance is usually less with a fixed-rate loan.
A 20-Year fixed rate loan is similar to a 30-year fixed rate, but the life of the loan is only 240 months compared to 360 months. Since the loan is being paid slightly faster than the 30-year fixed rate loan, monthly payments for this type of loan are higher than the 30-year fixed rate loan. Some Lenders allow for a lesser rate.
This type of loan requires payments for 180 months. Monthly payments for this type of loan are higher than 20 or 30-year loans. Generally, the longer a lender agrees to keep the interest rate “fixed”, the greater the risk to the lender, therefore, in most instances, interest rates on 15-year fixed rate loans are slightly lower than on 20 or 30-year fixed rate loans.
This loan works the same as the other loans but has fewer months of repayment.
A jumbo mortgage is a loan that has higher credit quality and is above conventional conforming loan limits. This allows for a higher loan amount and usually has a higher interest rate. The difference between a jumbo loan rate and fixed rate is usually dependent on the current market price of risk.
Odd Term Loans
Odd term loans gives you the flexibility to change your mortgage payments if rates go down. For example, you have a 30-year loan and rates go down after two years. We can put you on a 28-year mortgage with the new rate so you aren’t put back on a new 30-year loan.
Here are a few checkpoints to make sure you qualify for a fixed-rate loan:
- 5% down payment required on purchase
- Minimum credit score – usually 620
- Post- bankruptcy: can qualify after 4 years
- Post-foreclosure: can qualify after 7 years
- Post-shortsale: Can Qualify after 2 years (LTV restrictions may apply)