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.
- 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%
- 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.
John Cushma is a hands on Loan Officer from start to finish
For informational purposes only and is not a commitment to lend. Programs, rates, terms and conditions are subject to change at any time. Availability dependent upon approved credit and documentation, acceptable appraisal, and market conditions. Not all programs available in all areas. CrossCountry Mortgage Inc. is a Pennsylvania Corporation headquartered at 22 Rutgers Road, Pittsburgh, PA 15205. NMLS# 1423174 #3029; www.nmlsconsumeraccess.org; Equal Housing Opportunity.