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Conventional loans are the most popular and most basic loan type. A conventional loan can be used for both purchases and refinances of primary residences, 2nd homes, or investment properties. The most common misconception is that you need a minimum of 20% down and excellent credit. While this is ideal, this is not at all required. If you have a credit score of 680 or higher, that’s great!
Waiting years and years to save that down payment means missing out on so many opportunities. Aside from the fact that you’re just paying someone else’s mortgage when you rent, the housing market can change in an instant. Prices can increase or even double by the time you save what you thought was enough.
There are many varieties of the conventional loan. You can use it as a first-time homebuyer, for purchasing a second home, as an investment, or for refinancing.
Another consideration is your Debt-to-Income ratio (DTI). Common debts like car payments, installment credit cards, child support, alimony, etc. are counted against your paycheck. As long as this ratio is about half, you can still qualify. (This includes the payment for rent or mortgage) If you have a higher DTI and lower credit score, say below 680, FHA might be a better option for loans with a lower down payment.
The best reason to speak to a loan officer about your loan product options is that they can find what would be best for you now. We’re not some big bank with a bottom line; we care about getting you into the home of your dreams.
Conventional Loan Features:
Flexible terms & fixed rates
As little as 3% down payment
Best for Credit Scores above 620 w/20% Down
Up to 50% DTI – Compensating Factors Apply
Max Loan $647,200 SFR
*Higher loan limits may apply in certain counties. Speak to our loan experts today to review your local area for loan limit information.