• Conventional

  • Conventional Mortgage Loan

    A Conventional Loan is not right for everyone.  It is targeted towards the "top-tier" of potential qualified home buyers and even then sometimes isn't the best loan option.

    The Good:

    - Purchase a home for as little as 3% down

    - Credit scores as low as 640

    - Mortgage insurance will drop off once the loan hits the 80% loan to value (LTV) threshold, or 20% down payment made at closing.

    - The home does not need to pass the governments somewhat strict safety requirements like those for an FHA loan.

    - Maximum Debt to Income Ratio is 45%

    The Bad:

    - If you elect to put the minimum 3% down, the monthly "mortgage insurance" is extremely high.  I always advise clients to pony up the extra 2%, as the mortgage insurance is more reasonable with a 5% down payment.

    - You will notice a big difference in rate if your middle credit score is below 740.  The investors who buy Conventional Loans are looking for "top tier" borrowers, and try to sway low score buyers into more secure Government backed loans such as FHA, VA, or USDA.

    - Typical maximum seller assistance is 3%, however, it can be higher if you put a good bit more down.