A conventional mortgage offered by your Indianapolis mortgage lender is a home loan that’s not insured by the federal government and must adhere to conservative Fannie Mae and Freddie Mac guidelines.
A conventional loan is either “conforming” or “non-conforming”. These loans follow the guidelines, terms and conditions set by Fannie Mae or Freddie Mac and those that don’t meet these standards can also be considered conventional. If you aren’t sure about your credit rating, or have down payment concerns, a conventional mortgage can come with super low closing costs and flexible payment options.
Most Conventional Mortgages are fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same for the entire loan period. 10, 15, 20, 30 Year Fixed are the options to consider.
With an Adjustable Rate Mortgage (ARM), your initial interest rate and monthly payments are low, but will change during the life of the loan. ARMs are offered with initial fixed rate periods of 3, 5, 7 and 10 years.