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A conventional mortgage loan is usually for borrowers who have maintained a good payment history on their credit accounts, and keep low balances on their credit cards. The higher the credit score, the lower the interest rate on a conventional mortgage will be. It is possible to qualify for a conventional loan with a 620 score, but a 680+ score is preferred.
There are many different options for conventional loans. Borrowers can qualify with as little as a 3% down payment. If you have less than 20% down payment you will have a monthly mortgage insurance that will be based off your credit score and equity in the home. Unlike an FHA loan the mortgage insurance on a conventional loan can be removed once you have 20% equity in your property.
Another name for conventional loans are conforming because they conform to the requirements of Fannie Mae and Freddie Mac,
Usually a conventional loan underwriter will be less strict on the condition of the property than an FHA, USDA, or VA underwriter will be. When qualifying an applicant the underwriter will make sure any borrowers haven’t had a bankruptcy in the previous 4 years, and will need to verify your income.
To learn more call one of our loan specialists at 855-900-8732 or click here to get started
What are the benefits of conventional loans?
- As little as a 3% down payment
- Debt to income ratios up to 50%
- Lower interest rates
- Property doesn’t need to be in perfect condition