A conventional loan is the most common type of mortgage with the best rates. Typically, its rates and terms are fixed. It requires 10% down, good credit scores, and can be 15 or 30 years. Conventional mortgages are easier to process and allow home equity to build faster, as they require a much lower down payment. They are a good choice for those with average to good credit score, borrowers with moderate debt-to-income ratios, and those who do not have much money for a down payment. Conventional loans are of two types: conforming and non-conforming. conforming loans adhere to Fannie and Freddie’s guidelines. Non-conforming loans either have above the lending threshold Fannie and Freddie set or are made to borrowers who do not otherwise qualify for a conforming loan. Non conforming loans usually have a much higher interest rate than conforming loans.
For more information about annual conforming loan limits, please visit the website below:
https://www.fanniemae.com/singlefamily/loan-limits