Conventional Home Loans
What are conventional home loans? These are one of the most common types of loans for homeowners. These mortgages conform to Fannie Mae and Freddie Mac guidelines. Learn more below.Â
Is a Conventional loan right for you?
If you’re looking for a mortgage with low fees, a conventional home loan may be a good option for you. If you are eligible, there are a number of benefits.
Conventional loan benefits
- Save Money: With a down payment of 20% or more, you won’t need to pay for mortgage insurance.
- Flexible Terms:Â Choose what mortgage term works best for you! Options include 30, 20, 15, and 10 year terms.
- Low Down Payment Option: It’s possible to take out a conventional loan with a down payment of just 3%.
Conventional loan requirements
- Credit score of 620 or higher
- A down payment as low as 3%
- Two year income history
- A low debt-to-income ratio
Conventional Home Loan FAQs
3-5% depending on if you are a first-time home-buyer.
There is mortgage insurance on a conventional loan if your loan-to-value ratio is over 80%.Â
Yes, you can have up to 10 conventional loans at a time.Â
To calculate your debt-to-income ration, take your monthly debt payments divided by your gross monthly income. Your DTI ratio needs to be under 50% for conventional loans.Â
Underwriters will need to verify identification, two year income documentation, assets, and credit. Depending on your situation and finances, there may be additional documentation required.
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