Conventional Loans are designed for home buyers and borrowers with good or excellent credit. The home loan amount is generally limited to $726,200 for a single-family home, although amounts may be higher in regions where home prices are higher. Both fixed and adjustable rate options are available. Conventional loans are available with down payment requirements as low as 3.00%. Mortgage insurance is not required for loans with a down payment of 20% or higher.

Features

What You Need to Know

There are two kinds of conventional loans. One is a fixed rate mortgage and the other is an adjustable rate mortgage.

Fixed Rate Mortgage

A fixed rate mortgage is best if you’re planning on owning your home for at least 7 years. The total amount of your principal plus interest will not increase as long as you have the loan.

Here are some additional benefits of a Fixed Rate Mortgage with Academy Bank:

  • Rate protection - your rate stays the same even if mortgage rates go up.
  • Payment stability - you will always know what your monthly payment will be.
  • Budgeting ease - budgeting your mortgage expense is easier because your payment does not fluctuate.
  • Earlier pay off - even with a fixed rate, you can make extra payments to pay off your loan sooner.

 

Adjustable Rate Mortgage

An adjustable rate mortgage is a loan with an interest rate that may fluctuate over time but only after an initial "fixed" period (typically 5 or 7 years).

Here are some additional benefits of an Adjustable Rate Mortgage with Academy Bank:

  • Lower rates - during the fixed period, the interest rate is often lower than for other loans.
  • Lower payments - when your interest rate is low, your payments will be lower too.
  • Lower cost - if you are planning to own your home for only 5 to 7 years, this option keeps your payment lower for the initial term of the loan.
  • Rate caps - control how much your rate can increase.