Conventional Mortgages
A conventional loan is basically any kind of lender agreement that's not backed in full by the Veterans Administration or protected by the FHA (the Federal Housing Administration). All told, there are several broad categories of conventional loans. Fixed rate mortgages are simpler in some cases. A home borrower "locks in" at an interest rate, and he or she pays down the principal and interest on the mortgage every month at that rate.
The conventional mortgage allows home buyers very competitive interest rates and far more financing choices without some of the property restrictions of FHA that require a home to be basically "perfect" before you can close on your home. When looking at purchasing a short sell or bank owned property, the conventional loan product makes closing on the property much more realistic. The stark reality is, a seller in a short-sell situation won't typically have money to make required repairs, and most banks selling REO property sell the REO homes as-is and have a stack of offers from other buyers lined up right behind you.
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