Conventional Fixed & Adjustable-Rate Mortgage (ARM) Options
Conventional mortgages remain the most widely used loan type in the U.S. — trusted by buyers with strong credit and stable income. At Torres & Co. Lending, we offer both Fixed-Rate and Adjustable-Rate (ARM) Conventional loans, giving buyers flexibility to choose the structure that best fits their long-term financial goals.
What Are Conventional Fixed & ARM Loans?
- Fixed-Rate Conventional Loans provide a stable monthly payment for the entire loan term, with popular options like 30-year and 15-year fixed.
- Adjustable-Rate Mortgages (ARMs) offer a lower initial interest rate that adjusts periodically after an introductory fixed period (e.g., 5/6 ARM, 7/6 ARM, 10/6 ARM).
Both are underwritten to Fannie Mae or Freddie Mac guidelines and are ideal for borrowers with credit scores of 620+.
How It Works
- Down Payment: As low as 3% (varies by program — 3% with first-time buyer products, 5% with standard Conventional).
- Credit Score Requirement: Minimum 620; stronger scores qualify for better terms.
- Loan Terms: Common options include 30, 25, 20, and 15 years for fixed; 5/6, 7/6, 10/6 for ARMs.
- Mortgage Insurance: Required with less than 20% down, cancellable when 20% equity is reached.
- Property Types: 1–4 unit primary residences, second homes, and some investment properties.
Benefits of Fixed & ARM Conventional Loans
Fixed-Rate Loans:
- Predictable monthly payments for life of loan.
- Great for buyers who plan to stay long-term.
- Wide variety of term options (30-year, 20-year, 15-year).
ARM Loans:
- Lower initial interest rates than fixed loans.
- Great for buyers planning to sell, refinance, or relocate within 5–10 years.
- Can be more affordable in the short term compared to a 30-year fixed.
Fun Facts & Insider Details
- PMI Advantage: Conventional loans allow PMI removal at 20% equity, unlike FHA.
- Second Homes: Fixed and ARM Conventional loans are available for second homes — something FHA and USDA do not offer.
- ARMs Adjust with Caps: ARMs have built-in limits (“caps”) on how much your rate can change per adjustment period and over the life of the loan.
- Term Variety: Beyond 30 years, Conventional loans allow shorter terms like 25, 20, or even 10 years for aggressive payoff strategies.
- Investor Option: Certain Conventional ARMs can be used for investment properties.
Who Is the Best Candidate?
- Fixed Loans: Buyers who want payment stability and plan to keep their home long-term.
- ARMs: Buyers who want lower payments initially and expect to move, refinance, or upgrade within a few years.
- Second Home Buyers: Individuals purchasing vacation homes or weekend retreats.
- Strong Credit Borrowers: Anyone with 620+ FICO looking for competitive rates and flexible terms.
FAQs – Conventional Fixed & ARM Loans
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What’s the most popular fixed option?
The 30-year fixed is the most common because it balances lower payments with long-term stability.
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How much lower are ARM rates?
Typically, ARMs start 0.25%–1% lower than fixed loans, but they can adjust after the introductory period.
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Can I refinance from an ARM to a fixed loan later?
Yes. Many borrowers start with an ARM for lower payments and refinance to a fixed rate before adjustments occur.
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Are ARMs risky?
They carry more uncertainty than fixed loans, but caps limit how much rates can rise. ARMs can be smart for short-term homeowners.
Next Step
Whether you’re looking for the stability of a fixed loan or the flexibility of an ARM, we’ll help you find the Conventional option that fits your goals.
- Call Us: 305-440-1507
- Email: dolly@elitekyhomes.com
⚖️ Disclaimer: This guide is for educational purposes only. Loan approval and terms depend on credit, income, assets, property type, and program guidelines.
