Any type of creditor agreement that isn’t guaranteed by a government-backed program, like FHA, VA, or USDA would be considered a Conventional loan. They are backed by government-sponsored entities Fannie Mae (FNMA) and Freddie Mac (FHLMC).
There are two different types of Conventional loans: conforming and non-conforming. A conforming loan is backed by government-sponsored entities Fannie Mae (FNMA) and Freddie Mac.
Any loan that does not meet these criteria is a non-conforming loan.
Lower Fees: conventional loan fees are frequently lower compared to other loan products because the rate is set by the lender.
Interest Rate: A lender determines the interest rates to offer borrowers based on their credit score. A person with a great credit score is more likely to get a lower rate.
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Conventional Loans vs. FHA Loans
Here’s a brief overview of how conventional and FHA loans compare, looking at a few criteria for eligibility.