When people start to explore mortgage loans, they may become confused by the terms “conventional” or “conforming loan.” The truth is that conventional loans are relatively easy to figure out, particularly for people who have some basic familiarity with the general mortgage process. With the answers to these questions, people will understand the fundamentals of conventional mortgage loans.
How Do Conventional Mortgages Work?
When people get a loan from a bank that is not backed through some government entity, such as the Federal Housing Administration (FHA), their loan is most likely a conventional loan. The term “conventional mortgage” simply means that the government is not providing insurance for the loan, in case the borrower defaults. …
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