Conventional Mortgage
What is a conventional Mortgage?
A 30-year conventional fixed-rate mortgage has long been popular due to its fixed interest rate and lower monthly payments.
Borrowers can also apply for a shorter loan term and those typical have lower interest rates. A 15 or 20-year fixed-rate mortgage can help you pay off your home much faster building equity quickly, although your monthly payments will be higher than a loan with a 30-year term.
You don't need a large down-payment with a conventional loan, but you do avoid paying Private Mortgage Insurance (PMI) if there is a minimum down-payment of 20%.
Options:
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3% Down-Payment Program
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Fixed Rate Products & Adjustable Rate Mortgages (ARMs)
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Maximum loan in the St. Louis Area currently $845,000 for a single family home
How a Conventional Mortgage Works
The Federal National Mortgage Association (FNMA, or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac) are government-sponsored entities that drive the market for home loans. These quasi-governmental agencies have created standardized rules and guidelines.
Fannie Mae and Freddie Mac do not issue mortgages themselves. Instead, they insure mortgages issued by lenders, such as banks, and act as a secondary market for lenders.
