Utah Conventional Mortgage Loan
One of the central ideas that Trillion Mortgage, a mortgage loan company based in Utah, holds is the belief that knowledge is power. We want to arm our clients, who are shopping for a Utah mortgage, with as much information as they need to make an informed decision about their mortgage needs. There are a great number of options available for Utah mortgages including conventional loans and U.S. Government sponsored loans such as FHA and VA. The loan officers at Trillion Mortgage are experts in Utah mortgage loans and can assist you in determining which program would be the best fit for your specific needs. In separate articles, we have discussed the specifics of the FHA and VA loan programs; we are going to cover Conventional mortgage loans with this article.
What is a conventional mortgage loan?
Conventional loans, whether they are taken out as Utah Mortgages or mortgages in any other state, are often considered conforming loans or those that fall within the “conforming” underwriting guidelines of Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are U.S. Government sponsored enterprises that purchase mortgages from the lenders who originate them. The lenders often service some of the mortgages even though they are typically “securitized”, sold as securities that Fannie Mae and Freddie Mac can guarantee. Conventional mortgages are not insured or guaranteed by the government. There are also “non-conforming” loans, such as Jumbos, that fall outside the conforming lending limit but are considered conventional loans.
The underwriting guidelines for conventional mortgages can be at times more stringent than for government sponsored loans but often carry lower interest rates and closing costs. Borrowers must have good credit and those borrowers with the finest credit can receive the best interest rates. FHA makes allowances for borrowers with limited credit history but conforming loan guidelines do not typically allow for such concessions.
Borrowers must have their own money for a down payment or equity in the home for a refinance transaction. A minimum down payment of 5% or up to 20% is required depending upon the location and type of property being financed. Conventional loans will often serve those best who is financing less than 80% of the home value. FHA and VA guidelines allow borrowers to put down less money but in exchange the loans have higher closing costs by way of the upfront FHA mortgage insurance fee and in the case of FHA loans, monthly mortgage insurance is required as well. VA loans have a mortgage funding fee of anywhere between .5% to 3.3% of the loan amount that is added to the loan at closing though no mortgage insurance is required depending upon whether it is for a first time use, subsequent use or an refinance to reduce the interest rate. The loan officers at Trillion Mortgage can assist you in determining the amount that would be required for your new Utah mortgage.
Conventional loans can offer borrowers fixed or adjustable rate mortgages with terms that are typically 15 or 30 years. Though there are other loan terms available such as 10, 20 or 25 year loans, the loans with shorter terms often have lower interest rates and borrowers can benefit further by building equity faster. Contact the loan officers at Trillion Mortgage at (801) 261-2617 who can answer any questions you may have about financing your next Utah mortgage whether it is a purchase or a refinance loan.
It is best to understand all of your options and thus to work with a highly reputable mortgage loan company whose loan officers are trained and experienced professionals who understands the intricacies of all the mortgage types. After all, buying or refinancing a home will likely be one of the biggest financial decisions in your life. If you are a borrower looking for Utah mortgages, have excellent credit and 5% or more to use as a down payment and closing costs than a conventional mortgage could be an excellent option for you to use. The mortgage options available are great and utilizing the expertise of the Utah mortgage loan officers at Trillion Mortgage can help you determine what is the best loan for your circumstances. Call us today at (801) 261-2617.By: +Mark Schow