A conventional loan is available in fixed rate and adjustable rate.
- Do you want to be able to depend on paying one principal and interest payment amount over the course of your home loan, despite possible fluctuations in the interest rate?
- Do you plan on remaining in your home for a long period of time?
- For budgeting purposes, do you feel comfortable knowing that your payment will not change?
A conventional fixed rate mortgage can be assured with terms from 30 years down to an 8 year option. With just 5% down at closing for a primary residence, you can qualify for a conventional loan for any amount between $25,000 and $647,200. Super conforming loans are available in Salt Lake County up to $647,200, Tooele County up to $970,800, and Summit County up to $970,800. Payments made are based on the interest rate at the time the loan was originated and locked, and the principal loan amount which is amortized over the course of the loan. In addition, you can use a conventional loan to refinance up to 95% (when borrowing $647,200 or less)of your property’s current home value. At any time you can pay your loan off early without pre-payment penalties. If your monthly budget allows, and if you are looking to pay off your home faster, rates will be lower for a 15 year versus a 30 year loan. This would decrease your overall loan expense, while slightly increasing your monthly payment.
- Are you purchasing or refinancing a property now, but know you will be moving or refinancing in the next five-10 years?
- Do you want to decrease your monthly payments as much as possible by taking advantage of the lowest available interest rate?
A conventional adjustable rate mortgage allows you to capitalize on today’s lowest interest rate, with a fixed term for 5, 7 or 10 years. After the initial term is up, your monthly payment will increase or decrease annually, based on the current interest rate, no more than 2% per year, capping at 5% over your initial interest rate. When purchasing a home with a conventional adjustable rate, 10% down payment is required. You can refinance up to 95% of your home’s value, and you can pre-pay your loan without any penalties.