A conventional mortgage is a loan that “conforms” to the Federal Finance Housing Agency (FHFA) guidelines and are guaranteed by Fannie Mae or Freddie Mac. Conventional mortgages are sometimes called conforming mortgages.
Types of Conventional Loans
What is a Conventional Fixed-Rate Mortgage?
A fixed-rate mortgage has a rate that is locked in for the life (or term) of the loan. The interest rate will not change.
What is a Conventional Adjustable-Rate Mortgage?
An Adjustable-Rate Mortgage (ARM) has an introductory period with a lower interest rate that will adjust up or down with the market once the introductory period is up. Depending upon current interest rates – an ARM’s rate can be lower than a fixed-rate mortgage. That’s especially true for a Jumbo or Super Jumbo mortgage.
Mortgage Knowledge Center
What is a Conforming Loan?
What is a Conventional Loan?