Conventional Home Loans – Fixed and Adjustable Rate Mortgages in Indiana
When it comes to financing a home, conventional loans are one of the most common and flexible mortgage options available. Backed by private lenders and not insured by the government, conventional mortgages offer a wide range of choices, including both fixed-rate and adjustable-rate (ARM) structures.
Whether you’re buying your first home, upgrading, or refinancing, a conventional loan may be the right fit — especially if you have strong credit and a solid financial profile. At American Hero Home Loans, I’ll help you explore your options and choose the structure that aligns with your goals.
What Is a Conventional Home Loan?
A conventional loan is any mortgage not backed by a government agency like the FHA, VA, or USDA. These loans are originated by private lenders and often follow the lending guidelines of Fannie Mae or Freddie Mac. Conventional loans can be used for primary residences, second homes, or investment properties.
They are ideal for borrowers with good credit, stable income, and the ability to make a down payment — though options exist for down payments as low as 3%.
Benefits of Conventional Loans
- Low interest rates: Especially for borrowers with strong credit
- Wide range of loan terms: Including 10, 15, 20, and 30-year options
- No upfront mortgage insurance premium: Unlike FHA loans
- PMI can be removed: Private mortgage insurance (PMI) is cancelable once you reach 20% equity
- Available for various property types: Primary residence, vacation homes, and rentals
Fixed-Rate vs. Adjustable-Rate Conventional Mortgages
One of the key choices with a conventional loan is whether to select a fixed-rate mortgage or an adjustable-rate mortgage (ARM). Each has its pros and cons depending on your financial goals and how long you plan to stay in the home.
Fixed-Rate Mortgage
- Stable monthly payment: Your interest rate stays the same for the life of the loan
- Best for long-term homeowners: Offers predictability and peace of mind
- Popular term lengths: 15- and 30-year fixed are most common
If you’re planning to stay in your home long-term or want consistency in your monthly payment, a fixed-rate loan is typically the best option.
Adjustable-Rate Mortgage (ARM)
- Lower initial rate: Typically offers a lower interest rate for the first 3, 5, 7, or 10 years
- Rate adjusts periodically: After the initial period, the rate can increase or decrease based on market conditions.
- Good for short-term goals: May be ideal if you plan to move or refinance before the adjustment period.
ARMs can be a smart choice for buyers who expect to sell or refinance before the initial fixed period ends, but it’s important to understand how the rate can change and how that affects future payments.
Who Can Qualify for a Conventional Loan?
Conventional loans are best suited for borrowers with:
- Credit score of 620 or higher (740+ scores receive the best rates)
- Stable income and employment history
- Ability to make a down payment (as low as 3% for first-time buyers)
- Acceptable debt-to-income (DTI) ratio
Don’t let the credit score or down payment requirement discourage you — I’ll walk you through the details and help you compare all of your options, including conventional, FHA, VA, and USDA loans.
Why Work With a Local Loan Specialist?
When it comes to choosing between loan types and rate structures, experience matters. As someone who’s helped hundreds of homebuyers across Indiana, I provide:
- Personalized guidance based on your financial goals
- Quick pre-approval and clear communication throughout the process
- Local expertise in Lake, Porter, LaPorte, Jasper, and Newton counties
- Access to competitive rates and flexible loan options
Whether you’re refinancing or buying your first or fifth home, I’ll help you make informed, confident decisions every step of the way.
Frequently Asked Questions About Conventional Loans
What is the minimum down payment for a conventional loan?
As little as 3% for first-time buyers or those who qualify for special programs. Otherwise, 5% or more is standard.
Can I remove PMI from a conventional loan?
Yes. Private mortgage insurance is typically required with less than 20% down but can be canceled once you reach 20% equity.
Which is better — fixed-rate or ARM?
It depends on your plans. Fixed-rate loans are more stable, while ARMs may offer lower initial rates but can adjust later. I’ll help you evaluate both.
Can I use a conventional loan to buy a second home or investment property?
Yes. Conventional loans are available for primary homes, vacation properties, and rental real estate.
Final Thoughts
Conventional home loans offer flexible options for buyers and homeowners across Indiana. With fixed and adjustable-rate choices, low-cost PMI solutions, and competitive terms, they continue to be one of the most popular and versatile mortgage programs available today.
If you’re ready to explore your options, I’ll help you compare loan structures and choose what fits your life best — with experience you can trust and a commitment to putting your goals first.
