CONVENTIONAL HOME LOANS
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Conventional loans are great for most borrowers as they offer lower interest rates, varying payment options and terms, and reduced mortgage insurance (MI). These loans are issued by private lenders and are not government-backed, like a USDA or FHA loan. However, in order for a home loan to qualify as a conventional mortgage, it must comply with the following lending rules set by Fannie Mae and Freddie Mac:
- A minimum credit score of about 620 to qualify, depending on the loan amount, debt-to-income ratio, and other factors
- A debt-to-income ratio under 43%—may be lower for borrowers with lower credit scores
- No major credit report issues, like bankruptcy or foreclosure
- A down payment of 3% or more (20% if you don’t want to buy mortgage insurance)
- A total loan amount of $510,400 or less (in most areas — $765,600 in higher-cost areas)
- The loan limit for conventional mortgages varies by location.
The following documentations will be required to apply:
- Driver’s license or other photo ID
- Pay stubs from the past month (if W2 employee)
- Tax returns for the past two years
- Documentation to show how down payment will be produced
- A financial statement that shows assets and liabilities
- Credit report which we will order for you
An appraisal of subject property
A conventional loan is ideal for:
- Those with stable full-time jobs that provide regular, consistent paystubs
- Self-employed people with three or more years of consistent, reliable income
- Married couples with moderate to high household income and little debt
Take the first step towards homeownership - schedule your appointment with Our Community Mortgage today!
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Our Community Mortgage PRIVACY POLICY NMLS CONSUMER ACCESS © 2022. All Rights Reserved. (602) 545-7797 NMLS ID 2445453 Equal Housing Lender. Cost and fees may vary. Information is subject to change without notice. This is not an offer for extension of credit or a commitment to lend. Our Community Mortgage LLC, . All loans subject to credit approval and secured by real estate. www.nmlsconsumeraccess.org | Licensed in the State of Arizona | License # MB-1043668.
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