Conventional Loans – Fairfield County and Litchfield County

Conventional mortgages are a commonly utilized for purchasing, and Credit Works Mortgage excels at helping clients obtain them!

Loans of this type are not guaranteed or insured by the government. Lenders do not have guarantees carried for them for protection from the possibility of a borrower defaulting, which causes higher down-payment requirements (often 20% of the property’s price). 

Conventional loans also accent lower debt-to-income ratios, plus their income and credit score standards are stricter than many other loan programs. 

Rates for conventional mortgages are allowed to be fixed or adjustable. Adjustable-rate mortgages (ARMs) usually have interest rates that remain flat for a specified amount of time prior to starting to adjust based on the market. 

Terms for conventional loans typically are 15 or 30 years, however, some banks do offer longer and shorter terms for repayment.

Not many significant property and occupancy restrictions apply to conventional mortgages, yet each loan does get categorized as “conforming” or “non-conforming”. Mortgages that meet Fannie Mae and/or Freddie Mac underwriting qualifications are labeled conforming, and loans that do not meet the government-sponsored entities’ guidelines are non-conforming.

The key factor in the determination of a conventional mortgage’s classification is its amount. Mainly, all loans less than $417,000 for single-unit properties are conforming, and all loans more than that amount are considered non-conforming, or “jumbo mortgages”.

Jumbo mortgages will lead to borrowers facing higher interest rates due to their greater risks. While Credit Works Mortgage excels in Fairfield County and Litchfield County in Connecticut, conventional mortgages are largely consistent in many locations throughout the country.

Below is a chart displaying conforming mortgage limits for each property type:
 

Number of Units Max original principal balance Alaska, Guam, Hawaii, and U.S. Virgin Islands only
1 $417,000 $625,500
2 $533,850 $800,775
3 $645,300 $967,950
4 $801,950 $1,202,925

                                   
Maximum loan limits for high-cost areas:

 

Number of Units Contiguous States, District of Columbia Alaska, Guam, Hawaii, and the U.S. Virgin Islands
1 $625,500 $938,250
2 $800,775 $1,201,150
3 $967,950 $1,451,925
4 $1,202,925 $1,804,375

                                                                        
Borrowers who choose the conventional mortgage option will notice interest rates are significantly lower and their repayment terms are superior to other loans. Also, the processing of conventional loans is done at a more accelerated pace.

Furthermore, borrowers are given immediate equity in their homes, and down payments of 20% dismiss private mortgage provisions. Borrowers who reach the 80% loan-to-value ratio are allowed to cancel their private mortgage insurances. 

Other notable features of conventional mortgages include reduced closing costs and fees, as well as no penalties for early full repayment.

Credit Works Mortgage today is ready to help you with all your conventional mortgage needs. Call (203) 775-4774 or toll free at (800) 579-5822 today!