Conventional loans come in a variety of options and with excellent advantages for qualified borrowers.
Let us put you in contact with a home loan expert to help you get pre-approved today.
About Conventional Loans
A conventional loan is a type of mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), Department of Agriculture (USDA) and the Department of Veterans Affairs (VA) and is typically fixed in its terms and rate.
However, conventional loans are commonly interchangeable with ‘conforming loans’, since they are required to conform to Fannie Mae and Freddie Mac’s underwriting requirements and loan limits.
How do I qualify?
Conventional mortgage borrowers typically make larger down payments than FHA borrowers, and they tend to have a more secure financial standing and are less likely to default. A larger down payment means lower monthly payments. Plus, with the ever-increasing mortgage insurance premiums on FHA loans, payments for conventional loans that don’t require private mortgage insurance can be much more manageable in comparison.
Some other eligibility requirements include...
- Credit Score. The minimum credit score requirement is typically between 620-640 depending on the the wholesaler that is used.
- Income must be verified by reviewing your recent pay stubs, W2s and tax returns. Debt-to-income ratio cannot exceed 43%.
- Bank statements and investments will need to be verified to ensure the you has sufficient assets to close. These funds must be able to cover a down payment with any associated closing costs.