CONVENTIONAL Home Loans

A conventional home loan is a mortgage loan that is not insured or guaranteed by any government agency, such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the USDA Rural Housing Service. These loans are provided by private lenders and are typically sold to government-sponsored enterprises like Fannie Mae and Freddie Mac. Conventional home loans are a popular choice for homebuyers who have a stable income, good credit, and the ability to make a down payment.

• Flexible Down Payment Options
  • Conventional loans offer a range of down payment options, from as low as 3% for first-time homebuyers to larger down payments that can reduce monthly payments and eliminate the need for private mortgage insurance (PMI).
• Competitive Interest Rates
  • Borrowers with strong credit scores may qualify for lower interest rates, resulting in significant savings over the life of the loan.
• No Upfront Mortgage Insurance Premiums
  • Unlike FHA loans, conventional loans do not require an upfront mortgage insurance premium, potentially lowering your initial costs.
• Variety of Loan Terms
  • Conventional loans come with various term lengths, typically 15, 20, or 30 years, allowing borrowers to choose the term that best fits their financial situation and goals.
• No Prepayment Penalties
  • Most conventional loans do not have prepayment penalties, giving you the flexibility to pay off your loan earlier if your financial situation allows.
• Wide Range of Property Types
  • Conventional loans can be used to finance various property types, including primary residences, second homes, and investment properties.

To qualify for a conventional home loan, borrowers generally need to meet the following criteria:

• Credit Score: A minimum credit score of 620 is typically required, although a higher score may be necessary to qualify for the best interest rates.
• Debt-to-Income Ratio (DTI): Lenders prefer a DTI ratio of 43% or lower, although some may allow higher ratios with compensating factors.
• Down Payment: A minimum down payment of 3% is required for first-time homebuyers, while repeat buyers typically need at least 5%.
• Stable Income and Employment: Proof of steady income and employment history is required to ensure the ability to make monthly mortgage payments.

Conventional home loans offer a traditional and flexible path to homeownership for those with stable income, good credit, and the ability to make a down payment. With competitive interest rates, various loan terms, and no upfront mortgage insurance premiums, conventional loans can be an excellent option for many homebuyers. Whether you are purchasing a primary residence, a second home, or an investment property, a conventional home loan can help you achieve your homeownership goals.

For more information or to start your conventional home loan application, contact us today. We are here to guide you through every step of the process!