CONVENTIONAL LOANS
What is a conventional loan?
Conventional conforming mortgage is a loan that adheres to the guidelines set by Fannie Mae and Freddie Mac, two of the largest purchasers of mortgage loans. Conforming loan limits are based on the area: FHFA Conforming Loan Limits
- Mortgage Insurance Premiums - PMI: 0.5% to 1% of the loan amount per year paid by the borrower
- Private mortgage insurance (PMI) if down payment is less than 20%
- Down Payment Gifts - Only part can be a gift if down payment is less than 20%
Qualifying Requirements:
The higher your credit score, the easier it will be to get approved for a mortgage with a lower mortgage rate.
- Must have minimum credit score of 620.
- Debt-to-income ratio (DTI) to 43%.
- Down Payment - 3% to 20%
- Loan Terms - 10, 15, 20, or 30 years
- Mortgage Insurance – PMI is required when down payment is less than 20%. It can be taken off once loan is paid down to 78% LTV