CONVENTIONAL:
Conventional Loan Program.
A conventional mortgage loan is a “conforming” loan, which simply means that it meets the requirements for Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored enterprises that purchases Mortgages from lenders and sell them to investors. This frees up lenders’ funds so they can get more qualified buyers into homes.
One type of common non-conforming mortgage is a jumbo loan, which is a mortgage that exceeds Conforming Mortgages. Because there are several different sets of guidelines that fall under the umbrella of “conventional loans,” there’s no single set of requirements for borrowers. However, in general, conventional loans have stricter credit requirements than FHA loans.
Conventional Loan Requirements:
Down Payments
It’s possible for First time home buyers to get a conventional mortgage with a down payment as low as 3%. However, the down payment requirement can vary based on your personal situation and the type of loan or property you’re getting:
- • If you’re not a first-time home buyer or making no more than 80% of the median income in your area, the down payment requirement is 5%.
- • If you’re buying a second home, you’ll need to put at least 10% down.
- • If you’re getting an adjustable-rate mortgage (llevarlo a la parte de adjustable rate), the minimum down payment requirement is 5%.
If you’re refinancing a conventional loan, you’ll need more than 3% equity. In all cases, you’ll need at least 5% equity. If you’re doing a cash-out refinance, you’ll need to leave at least 20% equity in the home.
Private Mortgage Insurance
If you put down less than 20% on a conventional loan, you’ll be required to pay for PMI/Private Mortgage Insurance. It protects your mortgage investors in case you default on your loan. The cost for PMI varies based on your loan type, your credit score and the size of your down payment.
Contact
Location:
2030 crestview way Woodstock, GA 30188
Email:
icastiblanco@phomemortgage.com
Call:
+1 678-505-7898