What is a Conventional Loan?

A conventional home loan is any mortgage that is not insured or guaranteed, by the federal government. They are most popular with borrowers that good credit, who can afford a down payment, a stable job, and consistent income, and people who are overall financially stable.

Government-backed loans like the VA, FHA, USDA and other loan programs are designed more for borrowers who can’t afford a significant down payment, have less than perfect credit, are first-time homebuyers, and may need some type of financial assistance.

With conventional loans, Griffin Funding set the loan terms and works with our borrowers directly. In this situation, Griffin Funding has determined the borrower’s ability to make their payments on time, and won’t default on the loan. Government-backed loans, on the other hand, have terms set by the federal government ensuring or guaranteeing the loan, protecting the lender in the event the borrower defaults on the mortgage.

Conventional Home Loan Advantages

Conventional home loans are available for both new purchases and refinancing. They can be harder to qualify for because of additional credit and financial requirements. However, generally, they offer more flexible terms and fewer restrictions than government-backed loans. Some advantages of conventional loans from Griffin Funding include:

    • They are much simpler to apply and qualify for, with less paperwork, and fewer rules and regulations.
    • You have more options to choose from, terms are more flexible and customizable, making to easier to tailor to your specific financial situation and goals.
    • They can be utilized for a variety of property types, from single-family multi-family, condominiums, and even manufactured homes.
    • If you have at least 20% down payment, or at least 20% equity when refinancing, you aren’t required to pay mortgage insurance.
  • Conventional loan rates are often times a lot lower since the borrower is financially stable and has good credit.

Types of Conventional Loans from Griffin Funding

There are two types of conventional loans: fixed-rate and adjustable rate mortgages.

    • Fixed-rate loans have an interest rate that does not change for the life of the loan.The most common terms are 15- and 30-year. They offer more stable, and predictable payments won’t change. Monthly payments are usually very low and spread out over time. They’re a perfect long-term loan if you plan on staying in your house for seven or more years.
  • Adjustable rate mortgages have an interest rate that does change. There is an initial up-front period which the rate is fixed for usually one year. During this period, interest rates and monthly payments usually lower than a fixed-rate mortgage. However, after the initial period, your rate can change or adjust, higher or lower depending on market conditions. ARM’s are ideal for borrowers who plan on only staying in their home 3-, 5-, 7- or 10-years before the interest rate adjusts according to the mortgage terms.  

Special Conventional Loan Programs from Griffin Funding

    • HomeOne: HomeOne is a new low down payment conventional loan program designed for all first time home buyers — no matter where you live or how much they earn.
      • No income limits
      • No county restrictions
      • Down payment as low as 3%
      • Gift funds accepted from family members
      • Available on conventional fixed-rate loans up to the county loan limit

      Make home ownership a reality with Freddie Mac‘s HomeOne. 

    • HomeReady: HomeReady has similar features to HomeOne except with certain income limits.
  • Home Possible: Home Possible has the similar features to HomeOne except with certain income limits based on area.

Contact your Griffin Funding loan advisor to discuss which program is best for you.

Contact Us Today

Any questions? Chat with us now! Our Loan Officers would love to answer any of your questions and get you pre-qualified today!

The Griffin Funding Experience

At Griffin Funding you can expect transparency and open communication, a knowledgeable team of industry experts and a customer-centric team working together to make your home buying experience effortless and exciting. We are fast and efficient, closing most of our purchase loans in 30 days or less.

Griffin Funding will offer the right loan tailored to you (VA, FHA, Conv, Jumbo and much more). Contact us for more information on your mortgage loan needs.