Conventional Purchase Loans are broken down into two categories:
Conforming and Conventional Loans are often used interchangeably, though they’re not exactly the same. You can read about the subtle differences here. A Conforming Mortgage conforms to Freddie Mac and Fannie Mae guidelines. A Non-Conforming Mortgage does not. The government-backed loans mentioned above—USDA, VA, and FHA—are Non-Conforming.
Freddie Mac and Fannie Mae are GSEs (government-sponsored enterprises) that purchase loans from mortgage lenders to be sold to investors. This creates liquidity so that lenders can continue granting loans to homebuyers.
Conventional Purchase Loans may also come with one of two types of rates:
When an interest rate is fixed, it remains the same for the life of your mortgage. If an interest rate is adjustable, it usually starts out lower for the first few years of a mortgage and then changes at predetermined times, i.e., every six months, after the initial fixed period of the loan ends.
A Conventional Mortgage is distinct from other government-insured loans because it can be used to purchase multiple property types. These include a primary home, a vacation home, or an investment property. The same isn’t true for FHA, VA, and USDA Loans, which are only for purchasing primary residences.
Along with this flexibility, many homebuyers appreciate that Conventional Mortgages are customizable. This is especially true when working with Academy Mortgage. Academy Loan Officers have access to one of the largest product portfolios in the industry, giving them the opportunity to personalize your loan to you.
Your dream home awaits: Contact your local Academy Loan Officer.