15-, 20-, 30-Year Fixed Loan
A 30-year fixed conventional loan is a loan that has the same
mortgage payments for 360 months.
Conventional loans typically are harder to qualify for than FHA loans and can require a slightly higher down payment. However, in some cases rates can be lower and have lower closing costs. Also, monthly mortgage insurance is usually less or can be nothing with 20% down payment.
This type of loan is the same as the 30-year fixed rate loan
except the life of the loan is 240 months as opposed to 360
months. Since the loan is being paid slightly faster than
the 30-year fixed rate loan, monthly payments for this type of
loan are higher than the 30-year fixed rate loan. Some
Lenders allow for a lesser rate.
This type of loan is the same as the 30-year fixed rate loan except the life of the loan is 180 months as opposed to 360 months. Since the loan is being paid faster than either the 30-year fixed rate loan or the 20-year fixed rate loan, monthly payments for this type loan are higher than the other two loans. Generally, the longer a lender agrees to keep the interest rate "fixed," the greater the risk to the lender, therefore, in most instances, interest rates on 15-year fixed rate loans are slightly lower than on 20- or 30-year fixed rate loans.
Fixed Rate also have flexible terms - you can pick the amortization. 11 years, 12 years, 13, years etc., whatever you want. The advantage to the flexible program for a refinance is that you can pick up where they left off with your current mortgage with a lower rate and do not need to restart the loan. Or, for purchases, you can select the payment you are most comfortable with -for example, maybe the 25 year payment was too much buy a 26 years was just right.
5% minimum down payment is typically required but there is a 3% down option for Purchases and no cash out Refinances if one of the borrowers is a first time homebuyer or they income qualify for the HomeReady or HomePossible loan programs.
Minimum credit score - usually 620
Post- bankruptcy: can qualify after 4 years
Post-foreclosure: can qualify after 7 years
Post-short-sale: Can Qualify after 2 years (LTV restrictions may apply)