Conventional home loans quite simply are defined as loans that are not backed by a federal agency, such as the U.S. Department of Veteran Affairs, U.S. Department of Agriculture or Federal Housing Administration. Borrowers with a stable job, income and good credit are great candidates for conventional home loans.
Compared to government-backed products, conventional home loans are more flexible in their terms and have fewer restrictions. For instance, conventional home loan borrowers can avoid the cost of private mortgage insurance (PMI) when you make the standard 20% down payment. Or you can choose to pay for PMI but make a smaller down payment.
People with established credit and stellar credit reports who are on a solid financial footing usually qualify for conventional loans. More specifically, the ideal candidate should:
have a credit score of at least 680 and, preferably, well over 700; the higher the score, the lower the interest rate on the loan, with the best terms being reserved for those with the credit score over 740
have a debt-to-income ratio (DTI) (the sum of your monthly obligations compared to your monthly income) around 36%, and no more than 43%
be able to pay down payment of at least 20% of the home's purchase price
Fewer penalties and fees
Good interest rate for borrowers with good credit
Flexible mortgage terms (length)
Options for second home purchases
An opportunity to avoid mortgage insurance
Variable Conventional Home Loan options
1st Point Lending, Inc. offers conventional loans with 30-year and 15-year fixed rate options, as well as adjustable-rate mortgages.
We also are available to help you with high-dollar conventional home loans that are known as Jumbo loans.
If you are looking for a conventional home loan then 1st Point Lending, Inc. team can be a great support you. Please contact 1st Point Lending, Inc. home loan experts. Our team is at your disposal.