Many home loans offered by Henderson mortgage companies are backed by government agencies. This includes popular home loans such as FHA loans and VA loans. Loans that are not backed by a government agency are called conventional loans. Government-backed loans are restricted to certain amounts and are often tailored to buyers who may not have perfect credit or who have limited down payment availability. Conventional loans are often preferred by those with stronger credit and income or buyers who are searching for home loans that exceed the limits placed on government loans. At All American Home Mortgage, we offer great rates on conventional loan options designed to meet the varying needs of Henderson homeowners.
The majority of mortgages that are made by Henderson mortgage lenders are purchased by either Fannie Mae or Freddie Mac. To be eligible for purchase by these entities, home loans must meet certain criteria. Loans that meet these criteria and are eligible for purchase are called conforming loans. Those that do not are non-conforming loans. The maximum loan amount eligible for purchase is $424,100 although this can be as high as $636,150 in specially designated high-cost areas. Jumbo loans are one of the most commonly used non-conforming loans. A jumbo loan is simply a conventional loan that exceeds the conforming loan limit for an area.
In the past, conventional loans generally required down payments of 20% or more. Recently, conventional loans in Henderson have become available with significantly lower down payment requirements. Borrowers will not have to worry about paying private mortgage insurance (PMI) premiums if they are able to make the traditional 20% down payment. If a borrower can’t make the 20% down payment, they may still be able to cancel their mortgage insurance once 20% equity is reached. Mortgage insurance cannot be cancelled on government-backed loans such as an FHA loan.
Conventional loans are most commonly available as fixed-rate mortgages, adjustable-rate mortgages (ARM), and Hybrid ARMs. There are benefits to each type of rate depending a borrower’s situation and goals.
Many Henderson homeowners will opt for a fixed-rate mortgage as they offer peace of mind knowing that their mortgage payment will never change. The rate on a fixed-rate mortgage will remain constant for the life of the mortgage, regardless of what happens in the market. Fixed-rate mortgages are most commonly available as 15-year, 20-year, or 30-year loans.
The rate on an adjustable-rate mortgage will vary from time to time based on conditions in the market. An ARM can be a valuable option for anyone who plans to relocate or refinance in the near future as they generally start at a lower rate than comparable fixed-rate mortgages. Hybrid ARMs combine the components of fixed-rate and adjustable-rate mortgages. A 5/1 Hybrid ARM for example, begins with a 5-year fixed period followed by yearly rate adjustments.
All American Home Mortgage offers a variety of conventional loans options with great rates throughout Henderson and all of Nevada. Whether you are purchasing your first Henderson home or are interested in refinancing your current mortgage, we can provide a conventional loan option to meet your needs. For more information on our conventional loan offerings, contact us today.