Most loan programs in the US, such as VA or FHA, are insured by the federal government. A Conventional loan is not backed by any agencies – it observes the purchase limits of either Freddie Mac or Freddie Mae.

The conventional loan for homebuyers and homeowners in Michigan is offered by the two entities mentioned above. The Federal National Mortgage Association (Fannie Mae) was initiated in 1938 to counter lending limit problems in property purchases. Sometime later in 1970, the Federal Home Loan Corporation (Freddie Mac) was created to compete with Fannie Mae.

These private corporations buy mortgages from banks in order to increase banks’ lending limits for the housing market participants.

At e-Finance Mortgage LLC, we provide efficient application and competitive rates throughout Michigan. The loan’s options render borrowers with high credit capable of benefiting from varied lending limits of Fannie or Freddie.

Conforming and Non-Conforming

Conventional mortgage loan is any state is classified as conforming or non-conforming.

A conforming loan remains within the lending restrictions set by Freddie Mae or Freddie Mac. These entities state a conventional loan as acceptable only if it meets these limits.

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

Opposing that, a non-conforming loan is not approved by either of these private corporations. A conventional loan that exceeds $453,100 (hence called jumbo loan) is non-conforming. However, for certain high-cost areas in Michigan, this limit may be extended to $679,650.

MI Conventional Loan Requirements

A down payment of 20% or more of property price is usually required for a conventional loan. Once a buyer fulfills this requirement, they are not required to carry out private mortgage insurance (PMI).

Over the past few years, minimum down payments in certain districts of Michigan have reduced to 3%. However, this reduction does call for mortgage insurances, which might not be required when 20% property equity is fulfilled.

MI Conventional Loan Options

In Michigan, conventional loan options consist of fixed-rate and adjustable-rate, as well as a combination of both (hybrid).

Fixed-rate Mortgage (FRM) – the amount of FRM remains consistent though the duration of the loan. This mortgage option is unaffected by changes in the market conventional loan market rates. Fixed-rate mortgage is commonly opted as 15, 20 or 30 year long loans.

Adjustable-rate Mortgage (ARM) – the interest rate of ARM changes depending on market rate fluctuations. Buyers can gain from this mortgage option if they soon wish to refinance loan or relocate.

e-Finance Mortgage LLC offers stellar conventional loan rates and terms in Michigan. Apart from financing for new buyers, we also provide refinancing for current homeowners in the state.

If your want to know more about our conventional loan options, contact us today for expert guidance by our loan specialists.