Whether you’re moving into a new neighborhood, buying a vacation home, or investing in real estate, buying a house is more than just a monetary commitment. It’ll be a commitment to becoming part of a community, building a life, and maybe starting a family. So the last thing you want to do is guess at how much you can afford.
What are Conventional Loans?
Conventional loans are not backed or guaranteed by government agencies like the FHA or VA. They are made available through government-sponsored organizations called Fannie Mae and Freddie Mac, who set the guidelines for conventional loans. These organizations work to make sure that they remain affordable for buyers and homeowners.
Conventional loans combine fixed rates and a variety of low-down-payment options and assistance programs so that you can get more flexibility upfront and greater stability over the life of the loan.
HomeReady® and Home Possible®
If you can’t afford a large down payment or don’t have a high income, the HomeReady® & Home Possible® programs may allow you to qualify to get a conventional loan without having to pay mortgage insurance for the life (or at least part of) the loan.
Do I Need Mortgage Insurance?
You don’t need PMI (Private Mortgage Insurance) if you pay at least 20% down. If you do need PMI, you can eliminate those monthly payments once your equity reaches 20%.
No Credit Score? That’s OK!
If you haven’t ever had a credit score, then you may still be able to qualify for a conventional loan if you can demonstrate your financial responsibility by other methods, such as rent and utilities.