FIXED RATE CONVENTIONAL LOANS
15-, 20-, 30-Year Fixed Loan
30-Year Fixed
A 30-year fixed conventional loan is a loan that has the same mortgage payments for 360 months.
Conventional loans typically are harder to qualify for than FHA loans and require a slightly higher down payment. However, in some cases rates can be lower and have lower closing costs. Also, monthly mortgage insurance is usually less or can be nothing with 20% down payment.
20-Year Fixed
This type of loan is the same as the 30-year fixed rate loan except the life of the loan is 240 months as opposed to 360 months. Since the loan is being paid slightly faster than the 30-year fixed rate loan, monthly payments for this type of loan are higher than the 30-year fixed rate loan. Some Lenders allow for a lesser rate.
15-Year Fixed
This type of loan is the same as the 30-year fixed rate loan except the life of the loan is 180 months as opposed to 360 months. Since the loan is being paid faster than either the 30-year fixed rate loan or the 20-year fixed rate loan, monthly payments for this type loan are higher than the other two loans. Generally, the longer a lender agrees to keep the interest rate “fixed,” the greater the risk to the lender, therefore, in most instances, interest rates on 15-year fixed rate loans are slightly lower than on 20- or 30-year fixed rate loans.
- 5% minimum down payment required on purchase
- Minimum credit score - usually 620
- Post- bankruptcy: can qualify after 4 years
- Post-foreclosure: can qualify after 7 years
- Post-short-sale: Can Qualify after 2 years (LTV restrictions may apply)
