A conventional home loan is a mortgage that is not insured by the federal government, so their terms are more flexible than USDA, FHA or VA loans. Offering low interest rates, they’re a great fit for customers with good credit and financial stability who can afford a down payment.
The standard criteria for qualifying for a conventional loan is outlined below.
You should also carry good credit (typically a FICO score of 620 or greater), and total debt that does not exceed 45% of your income.
You’ll also likely need to provide a down payment on the home (as low as 3%, but ideally 20% or more in order to remove the possibility of paying a monthly Mortgage Insurance tax.)
Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, dies or is unable to meet the contractual obligations of the mortgage. One commonly-required insurance type is Private Mortgage Insurance (PMI).
As of 2021, that limit for most of the country is $647,200. AnnieMac is now offering a 2023 conforming loan limit of $700,000 in anticipation of the Federal Housing Finance Agency's conforming loan limit increase announcement. Conforming loan limits can go higher in counties where the housing costs exceed the national average.
Without Federal Government-mandated procedures to deal with, Conventional loans are simple to apply and qualify for. With tons of options and customizable terms available, we can craft a conventional loan that perfectly aligns with your financial status and long-term goals.
Required down-payments can be set as low as 3% of the home cost, making Conventional Loans more attainable than ever. By confirming our customers’ financial stability and credit score, we can offer amazingly low interest rates.
Here at AnnieMac Home Mortgage, we take the time to walk you through the mortgage process and ensure that you are financially ready for a mortgage commitment. If a conventional loan is needed and is something you can afford, we will be there for you every step of the way.