CONVENTIONAL

Dallas Conventional Mortgage

Conventional Mortgage FAQs

Dallas Conventional Loans
  • No mortgage insurance with 20% down payment*
  • Great interest rates
  • Low Fees
  • Maximum FNMA base loan amount $417,000
  • Maximum seller contribution (investment properties)
  • 2% and owner’s title policy
  • Maximum seller contribution (primary and second homes):
  • 95% LTV – 3% and owner’s title policy
  • 75.01 – 90% – LTV – 6% and owner’s title policy
  • 75% or less – 9% and owner’s title policy
  • No cost to apply for a Conventional loan

 

What is a conventional mortgage in Dallas?

 

A conventional mortgage is a home financing option in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. They can be either fixed-rate or adjustable rate mortgages. Conventional home loans are not uncommon. In fact, approximately 35-50% of mortgages are conventional.

 

How is a conventional mortgage different than the other Dallas mortgage loans?

 

Perhaps the biggest difference between a conventional mortgage and the other types of home financing options is the fact a conventional loan is not made by a government entity nor insured by a government entity. We refer to conventional mortgages as non-GSE loans, or non-government sponsored entity loans.

 

What are the advantages of a conventional mortgage?

 

While government-insured home loans are attractive because of their low or no down payment requirements, conventional mortgages also have their advantages including:
 

  • No upfront mortgage insurance payment*
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  • Private mortgage insurance can be removed as soon as the loan amount has reached 80 percent of the sales price*
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  • Lower cost borrowing option

 

What is the difference between a “conforming” and “nonconforming” conventional home loan?

 

Conventional mortgages are “conforming” if their amount is $417,000 or less for a single-family home. If the conventional mortgage is above the loan limit set by Fannie Mae and Freddie Mac, it is considered a jumbo loan and is a “nonconforming” conventional mortgage.

 

What is the difference between a fixed-rate conventional mortgage and an adjustable-rate conventional mortgage?

 

A fixed-rate conventional mortgage is the more common option of the two. Borrowers who opt for a fixed-rate mortgage are locked in to a set interest rate, which results in never-changing monthly mortgage payments for the duration of the loan term. Most fixed interest rate conventional mortgages have a 15 or 30-year term. The main advantage of a fixed-rate mortgage is inflation protection. A fixed-rate convention mortgage states that even if the market mortgage rate increases in the future, your mortgage rate has been locked in and will not change.
 
An adjustable-rate conventional mortgage, or ARM, is a home loan with an interest rate that could change throughout the duration of the loan term. Although an ARM may begin with lower monthly payments than a fixed-rate mortgage, keep in mind that:
 

  • Your monthly payments may increase over time
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  • Your monthly payments can increase even without an increase in the interest rate
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  • There is a possibility your payments will not drop even if interest rates drop
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  • If you try to pay the loan off early, you may incur a penalty

 
 

To determine the best mortgage program and term for your personal situation, please contact our experienced Dallas mortgage experts at (512) 524-8077 or by filling out a form located on the right side of the page.

*Statement based on loan amount of $175,000, 360-month loan term, 4.5% Dallas mortgage rate and 4.5972% Annual Percentage Rate.

This website marketing is not intended to offer loan services for properties in New York.