What are Conventional Loans
A conventional loan, also known as a conforming loan, refers to any mortgage loan not insured or guaranteed by the deferral government. Conventional mortgage loans could be either fixed-rate mortgages or adjustable-rate mortgages. These loans could be conforming or non-conforming.
Conventional conforming loans – Mortgage loans which conform to Fannie Mae and/or Freddie Mac standards, which includes Florida county loan limits starting at $484,350
Conventional non-conforming loans – Mortgage loans including jumbo loans for bigger loans as well as Alt-A or “higher credit risk” loan products for credit restricted borrowers
Jumbo Loans – Loans for amounts larger than the county limits set by Fannie Mae and |or Freddie Mac. There are no loan sealing amounts, in this case, lenders and investors set their limits.
What Do I Need to Qualify?
Minimum 620 credit score – If your credit is lower, consider other loan options such as FHA Loans, which can start at 600.
Minimum down payment – Down payments for conventional loans could be as little as 3% for first-time homebuyers and 5% for non-first-time buyers.
Maximum 49.9% Debt-To-Income Ratio
This will be determined upon your credit score and your financial reserves. For conventional loans, your debt to income ratio can be as high as 49.9%
Contact us at 561-777-7622 to find out if you qualify!
More on Conventional Loans
There are some established guidelines for borrower credit scores, minimum down payments, and income requirements. For example, most conventional loans require somewhere around 3 to 20 percent down. Fixed rates loans have terms of 15 or 30 years. Short-term loans on the other hand usually result in lower interest rates.
Adjustable-rate mortgages (ARMS) fluctuate interest rates in relation to the standard financial index such as LIBOR, which can make monthly payments go up or down accordingly. Regardless of the terms and interest rates, conventional loans may be cheaper if you plan to use a 20% down payment to avoid PMI. Conventional loans are your best option, as other mortgage loans such as FHA require PMI regardless of how much your down payment is.
Address: 1500 Gateway Blvd STE 220 Bonyton Beach FL 33426
Office: 561-777-7622
www.MortageDoneRight.com
