Based in New York City for Over 10 years, BFR is an expert in conventional financing. We will walk you through ways which a coop differs from other property types.
A conventional mortgage is any mortgage loan that is not guaranteed or insurance by a government agency (HUD/VA/FHA, etc.)
Most conventional mortgages are fixed rate mortgages, but they can be adjustable rate mortgages (ARMs) as well. Government entities such the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) insure and guarantee mortgages. The Federal Housing Administration is a part of the cabinet department of Housing and Urban Development (HUD). HUD was founded as a Cabinet department in 1965. Its origins were part of the “Great Society” program initiated by President Lyndon Johnson to form and execute policies and procedures relating to housing and metropolises
Mortgages that are insured by these agencies are commonly known as conventional mortgages. These loans typically adhere to Fannie Mae and/or Freddie Mac’s lending guidelines. Fannie Mae (the Federal National Mortgage Association) and Freddie Mac are government corporations that both buys and sells conventional loans. HUD also sets the maximum loan amounts limits by county and generally sets the requirements for borrowers to obtain a mortgage.
Typically, a conventional loan is a 30 Year fixed rate mortgage. This means it has a fixed mortgage rate for the entire 30 Year term of the loan. Conventional loans usually require at least a 20 percent downpayment, however, some conventional mortgages go as high as 97% financing. Please consult with a BFR Mortgage Loan Originator to see which product best suits your needs.
Conventional mortgages traditionally have had better interest rates than non-conventional mortgages (jumbo/portfolio loans) and can be a great option for those with the 20 percent down payment. However, we have noticed in recent years that some lenders offer better terms for their jumbo mortgages. These trends can change over time and BFR will always use technology and experience to help you determine the best loan for you.