Conventional Loans in Florida

Conventional loans are the traditional loans most people think of when they are applying for a mortgage. Unlike FHA or VA loans, the federal government does not guarantee conventional loans. There are two categories of conventional mortgage loans: conforming or non-conforming. These terms refer to the standards put forth by Fannie Mae and Freddie Mac. If the loan follows their guidelines, it is considered conforming. If it does not follow their guidelines, it is considered non-conforming, even if it has similar guidelines for determining loan eligibility.

Lenders considering a conventional loan for someone will look at their income, monthly expenses, credit history and pattern of stability (i.e., continuous work history, a fixed spending pattern, etc.). The standard down payment required is typically no less than 5 percent and can be as much as 20 percent of the purchase price. Lenders will also look to see if you have been able to save the down payment over time while maintaining your current expenses.

Interest rates for conventional loans can be fixed or variable. Fixed rate loans have an interest rate that stays the same throughout the life of the loan. This is convenient for those who want to know that their payment will be the same every month. Adjustable rate loans have low payments in the beginning, but as the rates change, so do the monthly payments. Some lenders offer a fixed-rate period for adjustable rate loans for 3, 5 or 7 years in the beginning of the loan term.

Conventional loans can be used to acquire different types of properties. While most people choose to use this type of loan to purchase their primary residence, it can also be used to purchase a second home and even some investment properties. There are no restrictions on the type of building you can purchase with a conventional mortgage, so borrowers can consider:

  • Manufactured Homes
  • Modular Homes
  • Warrantable Condos
  • Multi-family Residences
  • Planned Unit Developments

Loan amounts for conforming conventional loans can vary by region, but the standard maximum mortgage amounts for a conventional mortgage is $417,000, with a higher limit in certain areas considered “high rate” areas. Most lenders hold a maximum lending amount of 80 percent to 90 percent of the selling price or the appraised value of the property.

There are many aspects to conventional loans. For more information on which type of conventional loan would be better for you, contact us at (727) 531-0000 or send us an e-mail here and a representative will be glad to help you.

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Integrity Financial Services of Tampa Bay Inc. DBA Integrity Financial Services (“Company”) is a Florida Licensed Mortgage Lender NMLS #327908. Integrity Financial Services is not affiliated with any government agency.