In the simplest of terms, a Conventional loan is a mortgage loan that is not backed by the federal government. Government insured loans, such as VA or FHA, have strict lending limitations.

As banks are unable provide a vast monetary share for prospective home buyers in Iowa, the creation of Fannie Mae and Freddie Mac served to counter that problem. These private corporations provide flexible lending limits through conventional loans in Iowa.

Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Corporation (Freddie Mac) eliminated the dilemma of low lending limits which affect both banks and buyers.

e-Finance Mortgage LLC offers conventional mortgage program throughout Iowa. Our loan options encompass some of the best rates in the state.

Conforming and Non-Conforming

Although conventional loans typically “conform” to lending limitations (of Fannie Mae or Freddie Mac), certain conventional loans can also be classified as non-conforming.

Single Family 2 family home 3 family home 4 family home
$453,100 $580,150 $701,250 $871,450

Unlike the strict limit observance of conforming loans, non-conforming loans do not adhere to any lending standards. A prime determining factor is the loan amount of $453,100, which is the regular minimum loan limit (may increase to $679,650 for some high-cost districts). A loan that exceeds this lending limit may not be approved by conventional loan-offering entities.

IA Conventional Loan Options

Options for conventional loans encompass fixed-rate, adjustable-rate, and even a merge of the two (hybrid).

FRM (Fixed-rate Mortgage) – the loan duration include 15, 20 and 30 years. The mortgage amount is “fixed” throughout the chosen loan period, even if the market rates change during this time.

ARM (Adjustable-rate Mortgage) – borrowers who opt for this option may start out with an interest rate lower than FRM and other loan types. ARM varies with varying market rates.

IA Conventional Loan Requirements

Buyers opting for conventional loan are required to make a down payment of 20% of purchase price. Once this requirement is completed, the buyer is no longer obligated to carry out PMI (private mortgage insurance).

However, 20% is no longer a hard-set minimum down payment limit. For some areas in Iowa, down payments can be as low as 3%, though this would require completing PMI till 20% property equity is fulfilled.

The Iowa conventional loans not only reduce the hassle of frequent mortgage payments, but also allow buyers with ideal credit score to acquire a great residential property.

At e-Finance Mortgage LLC, we strive to help home buyers in Iowa to achieve their dream home. We offer some of the best rates and terms of conventional loans. Our loan options include both purchasing and refinancing options.

Get to know more about our loan services by contacting us today!