Conventional Loans

Conventional Loans

Conventional mortgage Loans are not insured or backed by a government agency such as the FHA or the VA.

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What is a Conventional Mortgage?

Before applying for a home loan, it is important to determine the best financial option for you. Phoenix conventional mortgages are loans that aren’t guaranteed or insured by the federal government. You may also refer to this type of loan as a non-GSE (non government sponsored entity) loan. Also known as a conforming mortgage, the conventional loan complies with the parameters set by Freddie Mac and Fannie Mae. You may obtain either an adjustable or fixed rate while your maximum loan amount is determined by the county and state of the home. The 2024 Arizona conventional loan limit is $766,550.

The word “conforming” is commonly used when discussing mortgage amounts. This is why conforming and conventional mortgages are considered interchangeable. A loan that exceeds the limit discussed above is considered a jumbo loan or non-conforming mortgage.

OFHEO (The Office of Federal Housing Enterprise Oversight) is responsible for setting the annual conventional loan limits while regulating expectations for the homeownership market. Their participation plays into the objectives of Fannie Mae and Freddie Mac for lower income and middle class Americans. They adjust the conforming loan limits by utilizing the October to October percentage fluctuation in average home prices for the previous year.

Amortized Phoenix conventional mortgages allow home buyers to borrow from a savings and loan establishment, a bank, credit union, or other mortgage brokers that fund their own loans. When applying for an amortized loan, you must consider the length of the loan along with your loan-to-value ratio. A fully amortized conventional loan is a mortgage that requires you to pay the same principal and interest on a monthly basis throughout the life of the loan.

An adjustable rate conventional loan is better suited for individuals anticipating an increase in their income down the road. Their initial interest rate is low and the loan itself has a maximum loan adjustment amount. If you are looking for financial help on the front end while you anticipate better financial stability in the near future, you may want to consider this option.

Phoenix conventional mortgages can benefit an individual whether they are a first-time buyer or in the process of refinancing. Just like most Arizona home loans, this option is going to require proof of income and credit stability. A credit score of 620 or better is standard across this borrowing platform. When lenders assess applicants, they look for specific patterns regarding their debts and spending habits. Properly analyzing your income in regards to your expenses typically allows these lenders to properly evaluate each individual application. If you plan on borrowing to purchase a home in the near future, you will need to be cognizant of your debt and spending habits moving forward. If you feel as though you’re ready, apply now for conventional loans Phoenix, AZ today!

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Ideally Suited For
  • Those with good credit scores
  • Those who are comfortable putting a slightly higher downpayment
  • This type of loan is the most common as about 35-50% of mortgages are conventional mortgages
Loan Features
  • Fixed rate loans are set to 15, 20, 25, or 30 year terms
  • You can choose from adjustable or fixed rates, as well as bridge, balloon, or hybrid loans, as each offers different structures