What is a conventional uninsured loan?
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Q:

What is a conventional uninsured loan?

A:

Quick Answer

A conventional uninsured loan is a mortgage that does not have private mortgage insurance, explains Homestead Funding Corp. Private mortgage insurance is usually required on mortgages of more than 80 percent of the value of the property.

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Full Answer

According to FinWeb.com, conventional loans usually require a borrower to put down relatively large down payments. If borrowers do not have a lot of cash on hand for a down payment, some lenders may finance the closing costs on a loan by charging the borrower with a higher interest rate. Conventional loans also charge origination fees and costs that vary from one lender to another.

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Related Questions

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    What is a conventional loan?

    A:

    A conventional loan is a home mortgage issued by a traditional lender without support from a government-backed loan program. Typically, with a conventional loan, the borrower pays 20 percent down on the purchase price of the house. However, borrowers can get traditional non-government bank loans with a smaller down payment.

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  • Q:

    What is the difference between FHA and conventional home loans?

    A:

    An FHA loan is backed by the Federal Housing Administration and is offered through specific lenders, while a conventional home loan can be obtained by almost any lender and isn't backed by an agency, according to SFGate. FHA loans are also offered according to specific parameters.

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    Who will grant a loan when nobody else will?

    A:

    Consumers with poor credit, limited employment and few financial assets can often obtain loans through payday or vehicle title loan providers. However, these loans often include multiple types of fees and high interest rates.

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    What is a discount loan?

    A:

    A discount loan is a short-term loan that has the interest and other borrowing fees subtracted from it when the borrower receives the disbursement; therefore, the borrower actually receives the face amount minus the interest. One example of the use of discount loans is the Federal Reserve offering them to banks. For example, a bank may request a $20,000 loan from the Federal Reserve, and the bank's reserves would increase by $20,000 minus the interest amount.

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