A conventional mortgage or conventional loan is any type of home buyer’s loan that is not offered or secured by a government entity. Instead, conventional mortgages are available through private lenders, such as banks, credit unions, and mortgage companies.
Many of us grew up thinking that the only type of loan there was was Conventional with a 20% downpayment. That’s not the case any more!
Conventional Loan Details
- Typically a fixed rate
- Not guaranteed by the Federal Government
- Typically a minimum of 5% down although some lenders have a 3.5% downpayment option
- Private Mortgage Insurance (PMI) if less than 20% downpayment is put down.
Conventional Loan Qualifications
- Credit score of greater than 680.
- Debt to Income ratio (DTI) has based on the lender’s minimum requirement. Some lenders have a hard stop at 43%.
- Down payment of 3.5% to 5.0% or more of the sales price.
- Proof of Income and Assets. The lender will ask for your full tax returns, W-2s and 1099s, in addition to bank statements and information on any investment accounts.
Let us know if you need help finding a lender that can help you obtain a conventional mortgage. We are happy to make some introductions for you.