A conventional loan is a loan backed by either Fannie Mae or Freddie Mac, the two entities which comprise the Federal Housing Finance Agency (FHFA).
Depending on rates and other market trends, 35-50% of all new mortgage loans are conventional loans.
Conventional Loans can be structured for any number of years, but the most common are 30, 20, 15, and 10-year mortgages.
The Conventional Loan Limit for single-family homes for 2016 is $417,000.
Fixed Rate Loans
Save Big With Low 15-Year Fixed Rates
A fixed-rate loan features a fixed payment amount for the entire duration of the mortgage. Your property taxes may go up (or rarely, down), and so might the homeowner's insurance in your monthly payment. For the most part monthly payments for a fixed-rate loan will be very stable.
Your first few years of payments on a fixed-rate loan go primarily toward interest. The amount paid toward principal increases up slowly each month.
Borrowers can choose a fixed-rate loan in order to lock in a low rate. Borrowers select fixed-rate loans when interest rates are low and they want to lock in at this lower rate. For homeowners who have an ARM now, refinancing into a fixed-rate loan can provide greater stability in monthly payments. If you have an Adjustable Rate Mortgage (ARM) now, we can assist you in locking a fixed-rate at the best rate currently available. Call Willow Bend Mortgage at (256) 734-6012 to learn more.
The security of a consistent rate and payment and the ability pay off your mortgage as quickly as possible. A 15-year fixed-rate mortgage allows you to pay less interest over the course of your loan. Lower rates and a shorter term makes this loan a great choice for the financially savvy customer.
Payments/How it Works
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Monthly payments based on interest rate, principal loan amount, and amortized interest over 15 years
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Your payment will not change throughout the life of the loan
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Pay your mortgage at any time without pre-payment penalties
Qualification Requirements
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Refinance up to 95% of your primary home’s value
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Buy a home with as little as 5% down (primary home)
Got questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions and get you started with a great low rate today!
30-Year Fixed Rates Are Very Low!
If you plan to stay in your home for the long term, sleep tight knowing you will have the stability of a consistent payment that never changes. Plan your budget with a consistent mortgage payment at a low rate that will stay the same through the life of your loan.
Payments/How it Works
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Monthly payments based on interest rate, principal loan amount, and amortized interest over 30 years
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Your payment will not change throughout the life of the loan
-
Pay your mortgage at any time without pre-payment penalties
Qualification Requirements
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Refinance up to 95% of your primary home’s value
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Buy a home with as little as 5% down (primary home)
Got questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions and get you started with a great low rate today!
Adjustable Rate Loans
There are many different kinds of Adjustable Rate Mortgages. ARMs are normally adjusted every six months, based on various indexes.
The majority of ARMs feature this cap, so they won't go up over a specific amount in a given period of time. Your ARM may feature a cap on how much your interest rate can go up in one period. For example: no more than a couple percent a year, even if the index the rate is based on goes up by more than two percent. Sometimes an ARM features a "payment cap" that guarantees your payment can't increase beyond a certain amount in a given year. In addition, the great majority of adjustable programs feature a "lifetime cap" — this cap means that your rate will never go over the capped amount.
ARMs usually start out at a very low rate that usually increases over time. You may have heard about "3/1 ARMs" or "5/1 ARMs". For these loans, the introductory rate is set for three or five years. After this period it adjusts every year. These loans are fixed for 3 or 5 years, then adjust after the initial period. These loans are usually best for people who expect to move within three or five years. These types of ARMs are best for people who will move before the loan adjusts.
Most people who choose ARMs do so when they want to get lower introductory rates and do not plan on remaining in the house for any longer than this initial low-rate period. ARMs are risky if property values go down and borrowers cannot sell or refinance their loan.
The HomeReady™ Mortgage
HomeReady™ is a mortgage program created in December 2015. It's backed by the U.S. government via Fannie Mae and available via most U.S. lenders.
Via HomeReady™, households in lower-income neighborhoods and in minority-heavy areas can get easier access to low-downpayment mortgages at today's current rates.
HomeReady™ allows a downpayment of just 3% on a home and permits the "income pooling" for all of the members of a household. This means that income from grandparents, parents, relatives, and working children can all be used to help qualify for a home loan.
For many families, this can mean the difference between getting approved for a loan and getting turned down.
HomeReady™ can also be used for a refinance, allowing up to 95% loan-to-value (LTV) in some cases.
In order to be eligible for the HomeReady™ program:
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You must not be an owner of another residential property in the United States
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You must agree to complete a 4-6 hour online homeowner counseling course
If you can meet these two criteria, you may be HomeReady™-eligible.
