What is a Conventional Mortgage?
Essentially, a Conventional Mortgage is a home loan that isn’t guaranteed or insured by the federal government; instead, these mortgages are underwritten by Freddie Mac and Fannie Mae. Conventional Mortgages are the most common type of home loan used today, and one of the biggest advantages of choosing a conventional mortgage is that they typically have the best rates. Conventional home loans can have term limits anywhere from 10 to 30 years and can either be fixed rate or adjustable rate. Conventional Mortgages once required a full 20 percent down, but in 2014, a new program was rolled out allowing for down payments as low as three percent.
Do you qualify for a Conventional Mortgage?
In order to be eligible for a Conventional Mortgage, you’ll need to provide your lender with at least two years of past address history, as well as documentation that verifies your identity. You’ll also need to provide employment and salary history, which will include tax returns and pay stubs. In general, you’ll want your debt-to-income ratio to be no higher than 43 percent. Additionally, Your FICO credit score should be at least 620 if you’re interested in a fixed rate loan.You’ll also need a down payment, but if you don’t have one saved, you can always look into a down payment assistance program, like Home in 5.
Find out if a Conventional Mortgage is right for you!
At Urban House Realty, our goal is to get you into your dream home. A big part of reaching that goal is helping you find the right financing, and we’re proud to say that a Conventional Mortgage is just one of your many options.. That’s why we’ve partnered with Traci Gratzek from NOVA® Home Loans.
If you’re interested in learning more about if a Conventional Mortgage is right for you, contact us!