Conventional Loans

Conventional loans are the most common and widely available mortgage option. For borrowers with good credit, balanced income and debt and some down payment, they are often the least complicated way to get the most flexible mortgage options. They are also the only loan type that can finance vacation homes and investment properties.

Conventional loans are not insured by any government agency. They are funded by mortgage lenders and underwritten to the broad guidelines set by Fannie Mae and Freddie Mac. Because conventional loans are designed to be able to be sold on the secondary market, they usually have to conform to those guidelines.

A large downpayment is NOT required to qualify for a conventional loan. Private Mortgage Insurance (PMI) is available for borrowers with less than 20% down to qualify for a conventional loan. For qualified borrowers, conventional loans with PMI are available with as little as 3% downpayment.

PMI premiums are based on loan to value (LTV) with rate tiers at every 5% above 80 (80-85, 85.01-90 etc) and are heavily affected by credit score. Borrowers with a credit score above 740 can get very low PMI rates, and the coverage will automatically terminate when the loan reaches 78% of the original value. In some cases, borrowers with a high credit score may consider a Lender Paid MI option that eliminates the monthly MI entirely.

Some highlights of Conventional loans:

  • The most flexibility in loan terms, from 10-30 year amortization
  • Private mortgage insurance is available for loans with less than 20% down
  • No monthly PMI loans are available for borrowers with excellent credit
  • Can be fixed or adjustable rates
  • The maximum conforming loan limit is now $424,100, with expanded loan limits in some high-cost areas
  • For most programs, there are no income restrictions
  • Can be used to finance vacation homes and investment properties
  • Available for purchase and refinance transactions.

Pinnacle Mortgage Corp. is committed to offering the widest selection of conventional loan options in New England. Because we are not a bank, we can work with many mortgage lenders to make sure that we have have the right combination of conventional loan options for you. We work with some of the most aggressive rate lenders, some of the most flexible underwriting lenders, and some of the broadest product option lenders in the region and the country. If you’re looking for a multi-family investment property in Manchester, a vacation home in Laconia, or a great rate on your new home in Concord or Salem, we have the right conventional mortgage option for you.