Traditional Mortgages
Explore VA loans, FHA loans, conventional loans, and other traditional mortgage products to find a home loan that best suits your needs.
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KEY TAKEAWAYS
- The term “traditional mortgage” refers to a wide range of different home loans that often share similar features when it comes to the approval process, income verification, and documentation requirements.
- Some of the key benefits of traditional mortgages include low down payment requirements, competitive rates, flexible lending options, and consumer protection features.
- While traditional mortgages can be a great option for many, some of these loans can be strict when it comes to qualification requirements and income verification.
Traditional Mortgage Products
What Is a Traditional Home Loan?
The term “traditional mortgage” refers to a broad category of loan types that typically have similar loan approval processes, income verification standards, documentation requirements, and so on. Traditional mortgages are often referred to as conventional loans, although this characterization isn’t completely accurate.
A conventional loan is any loan that is backed by a private lender rather than the government. While Griffin Funding does offer conventional loans, several of our traditional mortgages—such as VA loans and FHA loans—are backed by the government.
Traditional Mortgage Loan Options
There are many different types of traditional home loans available, each of which carries unique features and caters to different borrowers. Explore our traditional mortgage offerings below:
VA Loans
VA loans make it possible for qualifying veterans and service members to secure a mortgage with no down payment, a competitive interest rate, and beneficial loan terms.
FHA Loans
FHA loans provide assistance to first-time home buyers, allowing them to secure a mortgage with as little as a 3.5% down payment. FHA loans also help homeowners with challenged credit refinance.
Investment Property and Second Home Loans
Whether you’re looking to expand your real estate portfolio with an investment property or purchase a vacation home, our investment property loans can help you reach your goals.
Conventional Loans and Mortgages
Conventional mortgages often serve as a great option for the typical home buyer, and we have adjustable- and fixed-rate options to choose from.
USDA Mortgages
If you live in a qualifying rural area, then you may be eligible for a USDA mortgage that allows you to purchase a home with zero percent down.
Adjustable-Rate Mortgages
If you’re unhappy with current interest rates, consider an adjustable-rate mortgage. With an adjustable-rate mortgage, you pay a fixed interest rate for a set period of time and then your rate can go up or down based on housing market conditions.
Fixed-Rate Mortgages
Fixed-rate mortgages allow buyers to lock in an interest rate when they purchase their home, providing homeowners with a single stable interest rate until the repayment period ends or the buyer chooses to refinance.
Home Equity Loans
When you take out a second mortgage, you can tap into your home’s equity and get cash to pay down debt, complete home improvement projects, fund big purchases, and more. Griffin Funding offers competitive rates and excellent customer service on all home equity loans.
Reverse Mortgage Loans
If you’re above the age of 62 and have equity in your home, you may qualify for a reverse mortgage loan. Reverse mortgages allow you to access the equity in your home and receive tax-free payments without having to make any payments yourself.
CalHFA Loans
If you’re a first-time home buyer in California, you may be eligible for a CalHFA loan. CalHFA loans can help home buyers cover down payment and closing costs, making it possible to purchase your dream home without emptying your savings account.
Areas We Serve
Pros and Cons of Traditional Mortgages
Loans that fall under the traditional mortgage umbrella vary quite a bit, so each particular mortgage product will have its own benefits and drawbacks. However, traditional mortgages do share some similar pros and cons, which we take a look at below.
Pros of traditional mortgages
- Low down payment requirements: Many traditional mortgage options offer very low down payment requirements. With a conventional loan, you can secure financing with a down payment as low as 3-5%. Options such as VA loans and USDA loans even allow you to secure a mortgage with no down payment at all.
- Highly competitive rates: Traditional mortgages such as conventional loans, VA loans, and FHA loans offer some of the lowest rates relative to other home loan options on the market.
- Flexible lending options: With traditional mortgages, you have a wide range of options to choose from and you can use them for a variety of purposes. Whether you’re a first-time home buyer purchasing a primary residence or an experienced investor looking to expand your portfolio, there’s a traditional home loan out there that can help.
- Consumer protection features: Most (but not all) traditional mortgages are considered “qualified mortgages”. This means that they meet requirements set by the Consumer Financial Protection Bureau (CFPB) that are designed to protect borrowers by minimizing certain risky loan features.
Cons of traditional mortgages
- Strict requirements: Many traditional mortgages come with relatively strict lending requirements. In some cases, borrowers will have to meet high credit, income, and DTI requirements in order to qualify for financing.
- Rigid income verification process: Traditional mortgages typically require borrowers to prove their income through tax returns and pay stubs. This income verification process may not work for everyone, especially business owners, investors, retirees, and others with non-traditional income. If you’re looking for home financing options with more flexible income verification requirements, take a look at our non-QM loans.
Explore Our Traditional Home Loan Offerings Today
At Griffin Funding, we have a variety of traditional mortgage products that can help you achieve your home buying goals. We offer excellent customer service and a personalized experience for all of our borrowers, so you can rest assured that you’re approaching the home buying process in a way that best aligns with your unique goals and needs.
Reach out today to schedule a free consultation and take the first step towards homeownership! You can also download the Griffin Gold app to financially prepare for buying a home by managing your finances, tracking your credit, accessing easy-to-use calculators, and so much more.
Frequently Asked Questions
The credit score you need will depend on the loan you’re applying for. While, for example, VA loan credit score requirements can be somewhat flexible, conventional loans tend to be more stringent. In general, lenders like to see potential home buyers that have a minimum credit score of 620. However, the higher your credit score is, the better your interest rate and loan terms will be.
The minimum down payment on a traditional home loan varies depending on the specific type of loan you’re applying for. Qualified borrowers applying for VA loans or USDA loans can potentially secure financing with no down payment. Those taking out conventional loans will typically have to put a minimum of 3-5% down, or 20% down to avoid private mortgage insurance (PMI).
If you’re taking out a loan for an investment property or second home, you will likely face a higher down payment requirement than if you were purchasing a primary residence.
Your interest rate depends on the type of loan you take out. While some loans are more reliant on market conditions to determine a rate, others—such as VA loans and some loans for first-time home buyers—are able to offer lower rates due to special programs or government backing.
The interest rate for your mortgage will depend on a number of factors. In general, the two largest factors impacting your interest rate will be market conditions and your own financial situation. You can typically qualify for a lower interest rate if you have a high credit score, low DTI, and a high income relative to the loan amount you’re applying for.
With that being said, you can secure the best rate on a traditional home loan by taking steps such as:
- Optimizing your credit score
- Paying off debts
- Increasing your income
- Maintaining long-term employment
- Saving up for a bigger down payment