Out of all the loans, the majority of mortgage loans are conventional loans. A conventional mortgage is not backed by any federal agency, and you can obtain one from just about any lender, such as a mortgage company or a bank. Conventional loans are loans made by private entities such as banks, credit unions, private lenders or thrifts. There are two types of conventional loans which include conforming and non-conforming. Conforming loans are when they are made out for about $417,000 or less for single-family homes. This is also known as the conforming loan limit. Conforming loan limits can be higher in pricier regions of the country. For example, in states such as California, many regions have a high cost of living, therefore the loan limits are adjusted by county. Los Angeles County has a limit of $625,500. Ventura county has a loan limit of $598,000 and Santa Barbara has a County limit of $603,750, as examples. Non-conforming loans are loans that exceed the conforming loan limit, which lenders also refer to as jumbo loans. One difference between these two loans is that non-conforming loans will most likely come with higher interest rates. Conventional loans come in a variety of types including fixed-rate and adjustable-rate. They also have varying terms which include 30 years, 20 years, 15 years, or 10 years. However, the most popular conventional loans having a lifespan of either 30 years or 15 years. A shorter-term loan usually results in a lower interest rate. Fixed rate conventional loans will keep the same interest rate throughout the years while adjustable rates do not. This means that the interest rate can vary. These adjustable loans generally begin with an interest rate that is below a comparable fixed rate mortgage, and could allow you to buy a more expensive home. However, the interest rate may change at certain times depending on the market conditions. Conventional mortgage lenders rely heavily on consumers' three-digit scores.


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