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Conventional Loan

Conventional Loan

A mortgage securing a loan made by investors without governmental

underwriting, i.e., which is not FHA insured or VA guaranteed. This type of loan is customarily

made by a bank or savings and loan association.

A type of mortgage that is not insured or guaranteed by the federal government or any of its agencies. Instead, this type of loan is backed by private lenders, such as banks, credit unions, and other financial institutions. The terms and conditions of conventional mortgages can vary significantly, depending on the lender and the borrower's credit history, income, and other factors. Generally, borrowers with good credit scores and stable income will be able to qualify for lower interest rates and more favorable terms. However, borrowers with lower credit scores or unstable income may face higher interest rates and stricter requirements. One advantage of conventional loans is that they usually offer more flexibility than government-backed loans, allowing borrowers to choose their own home and use the funds for a wider range of purposes. However, they also carry more risk, as borrowers are solely responsible for repaying the debt. Overall, conventional loans can be a good option for those who have a strong credit history and financial stability, but it's important to do your research and carefully consider the terms before applying.

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