A Conventional Loan is a loan that follows Fannie Mae & Freddie Mac guidelines. A Conventional Loan has no government insurance or guarantee and, as a result, has Private Mortgage Insurance (PMI). The Conventional Loan can be a 10, 15, 20, 25, and 30-year fixed-rate mortgage with no prepayment penalty and no balloon.
· Down Payment - 3% of contract price.
· Private Mortgage Insurance (PMI) - Required with less than 20% down. PMI paid by Single Premium (included in closing costs, paid up-front) or Monthly Premium (monthly PMI premium is required until you reach 78% of the loan-to-value / LTV, based on the scheduled date from the original amortization of your loan. You may qualify for an early removal of the PMI payment when your loan reaches 80% LTV - based on the lesser of the original value or the purchase price - which can be achieved faster if you make additional monthly payments) Premiums vary based on credit score and down payment.
· Minimum Credit Score - 620
· Up-Front Fees - $450 appraisal fee