A conventional mortgage is one that’s not guaranteed or insured by the federal government. Instead, they are available through private lenders, such as banks, credit unions, and mortgage companies.

Conventional mortgages have a fixed rate of interest, which means that the interest rate does not change throughout the life of the loan. This gives San Diego homebuyers a sense of stability that is not present in the case of, say, an adjustable-rate mortgage. Interest rates for conventional loans tend to be lower than rates for FHA loans yet higher than those of VA loans.

Conforming conventional loans must fall within the limits set by Fannie Mae and Freddie Mac. As of 2021, the limit is $548,250. If the loan surpasses that limit, it becomes a jumbo (non-conforming) loan. Usually, you’ll be able to borrow more money on a conventional loan than on an FHA loan.

If your credit score is in good shape and you can afford to make the required down payment, then a conventional mortgage might be the right choice for you. If not, consider getting a government-insured mortgage instead.

Before applying for any loan, it is best to consult with a local San Diego home loans and refinance expert, like Olivia Guinn, that can help you determine the best financial option for you. To get started, contact Olivia today by calling 619.227.9173. You can also complete an application online to quickly find out which lending programs you may qualify for.