A conventional mortgage is a private-sector loan, not guaranteed or insured by the U.S. government.
In almost all cases, a conventional loan from HomeStreet will be made according to agency underwriting standards set by Fannie Mae and Freddie Mac. Conventional mortgages usually require a minimum down payment of 5% to 20%, while some government programs require smaller, or in some cases, zero down payment. While the down payment requirement is higher than that of the government-backed programs, a conventional mortgage usually requires less paperwork and may have lower costs. A conventional mortgage may require a higher credit score to qualify for the best interest rates and fees.
For borrowers with available down payment funds and high credit scores, a conventional loan will often be the best option, provided the loan size falls within conforming loan limits. To find out about loan limits by location in Hawaii, contact HomeStreet today.