Washington Conventional Loan

Unlike most loan programs which are backed by the federal government, the Conventional loan is not guaranteed by any of the agencies. This loan conforms to the underwriting limits of either Fannie Mae or Freddie Mac, hence the term “conventional”.

The Washington conventional loan is offered by either of the two—the Federal National Mortgage Association (Fannie Mae), created in late 1930s, or Federal Home Loan Corporation (Freddie Mac), created in 1970. The creation of these was meant to resolve the purchase and lending limit dilemma in the housing market.

e-Finance Mortgage LLC offers competitive rates for conventional loans. Where most government-insured loans have strict limits, the conventional loan allows borrowers with strong credit to take advantage of versatile lending options provided by Fannie or Freddie.

Conforming and Non-Conforming

Washington conventional mortgage is categorized as either conforming or non-conforming. A conforming loan “conforms” to the requirements of Fannie Mae or Freddie Mac. It is considered eligible only if it meets those guidelines and lending limits.

On the other hand, a non-conforming loan is not considered eligible by these entities as it does not meet their requirements. This includes loans that exceed $424,100 (referred to as a jumbo loan) may not be approved, though the limit may be exceeded till $636,150 for certain high-cost areas.

WA Conventional Loan Requirements

The state’s conventional loan commonly requires a down payment of 20%, or more. This avoids the need to fulfill private mortgage insurance (PMI).

Due to the mortgage crisis in recent years, down payment limitations have reduced to 3% in certain districts. However, lesser down payment percentages do require mortgage insurance, which may be cancelled once 20% property equity is reached.

WA Conventional Loan Options

Conventional mortgage options for Washington buyers include fixed-rate, adjustable-rate, and a combination of both (hybrid). The chosen option depends on a borrower’s case and goals.

Fixed-rate Mortgage (FRM) – the mortgage amount is constant throughout the span of the mortgage, regardless of fluctuation of market rates. FRM is most usually obtained as 15, 20, or 30 year loan.

Adjustable-rate Mortgage (ARM) – the mortgage interest rate varies according to market conditions. Buyers opting for ARM may find this option quite valuable choice if they plan on refinancing or relocating in the near future.

At e-Finance Mortgage LLC, we offer beneficial rates and flexible terms of conventional loan options in Washington. We provide financing for first-time homebuyers as well as refinancing for existing homeowners.

Contact us today to acquire more information on our Washington conventional loan services.