Conventional Mortgage Loans

What is a CONVENTIONAL mortgage loan?

A Utah conventional mortgage is a loan that is not insured by the government (like FHA, VA, or USDA loans), but they typically meet the guidelines that have been set by Fannie Mae or Freddie Mac. These loans are also referred to as conforming loans. Conventional loans have good rates and loan terms and, lower closing costs than other types of loans. Conventional home loans usually require you to have good-to-excellent credit and credit scores, lower monthly debt payments, and steady income.
 

Buying a Home with a Conventional Mortgage

When buying a home with a conventional loan you will need a minimum down payment of 3%. Currently, Advanced Funding offers a loan with only a 1% down payment. Contact us for further information, 801-272-0600.

These loans allow you to buy a primary residence, a second home, or rental properties, other loans often limit you to buying a primary residence. Most Utah conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments (PUDs), and one to four family residences.

If you have at least a 20% down payment you are not required to buy private mortgage insurance (PMI). In the event you do not have a large down payment there may be options to reduce your monthly mortgage insurance payment or eliminate it by increasing your mortgage rate or paying for it in a lump sum. The cost of mortgage insurance on these loans usually cost less than an FHA loan and are cancelable when your home equity reaches 20%.

 

 

Refinancing a Conventional Loan

A conventional mortgage can refinance any loan type, there are many reasons you many want to consider refinancing to this type of loan.

  • Cancel FHA mortgage insurance or PMI
  • Consolidate a first and second mortgage
  • Refinance another conventional loan
  • Reduce the length of your loan
  • Refinance an adjustable rate mortgage (ARM)

More refinancing information can be found here.
 

Types of Conventional Loans

Fixed Rate Mortgages: Your interest rate and principal and interest payment doesn’t change. You are able to choose from multiple loan terms when choosing a fixed rate loan. The most common loan lengths are 30 year fixed and 15 year fixed. Other loan terms are available, such as 20, 10, or 5 year options. The shorter your loan term the higher your payment will be. As your Utah mortgage broker we can help you choose the option that is best for your loan needs.

Adjustable Rate Mortgages: Just like a fixed rate loan, an ARM loan as many options to choose from. Today the majority of these loans come with an initial fixed period before your interest rate and mortgage payment can change. After the initial period, your mortgage interest rate can change once a year. Adjustable rate loans are available with the following terms:

  • 3/1 ARM: Fixed rate for 3 years, adjustable rate for the remaining 27 years
  • 5/1 ARM: Fixed rate for 5 years, adjustable rate for the remaining 25 years
  • 7/1 ARM: Fixed rate for 7 years, adjustable rate for the remaining 23 years

What is the Difference Between FHA Loans and Conventional Mortgages?
 

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Your Local Utah Mortgage Broker

As a Utah mortgage broker we work with several different mortgage lenders, enabling us to offer you a variety of mortgage programs at the best mortgage rates and lowest fees available. Working with several lenders allows us to offer more options to help you achieve your goals. Whether you're buying a new home or refinance your current home, Advanced Funding is here to help. Our loan professionals are available to help you during regular business hours or time that is more suitable to your needs. Call today for more information, 801-272-0600.

Utah VA LOAN ADVANTAGE

Veterans Affairs mortgages, better known as VA loans, make it easier for veterans to get financing to buy a home. Utah VA loans usually do not require a down payment and are available to military veterans and active military members. The Utah VA mortgage remains one of the few mortgage options for borrowers who don’t have the money for a down payment. VA loans are somewhat easier to qualify for than conventional mortgages. It offers a great benefit to those who are serving or have served our country.

Advanced Funding Home Mortgage Loans
6589 South 1300 East, Suite 200
Salt Lake City, UT 84121

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