A conventional loan is a home loan for individuals who have steady income, good credit and have funds available for a down payment. A conventional loan requires a minimum of a 3% down payment. The Craig Bland Mortgage Team helps buyers with applying for a conventional loan when purchasing property.
A conventional loan is not insured by the federal government (like USDA, FHA and VA loans) and can be the preferred route to home financing for many homebuyers and those purchasing investment property.
Applying for a Conventional Loan
Typically, a conventional loan requires that borrowers have 3-20% of the home's value as a down payment. Lenders who originate conventional loans will review debt/income ratios and monthly housing costs. Also reviewed in the conventional loan application are credit scores, credit history and income over the past several years. Those who have gone through bankruptcies at least four years ago or foreclosure at least 7 years ago are eligible for a conventional loan, but must have excellent credit histories. Most loan programs review each applicant based on the Fannie Mae and Freddie Mac guidelines.
Typically, we will review the following items with you when applying for a conventional loan:
- Your Employment (Is your income and employment steady?)
- Down Payment (How much can you afford to put down?)
- Credit History (Is your credit good, do you have late payments?)
In addition, we can discuss the requirements for mortgage insurance where necessary and setting up escrow account, which will allow you to have your mortgage insurance, homeowners insurance and property taxes included as part of your monthly mortgage payment and paid on your behalf.
Learn about the Home Buying Process from Fannie Mae, and then get preapproved for a conventional loan from Success Mortgage Partners!
Conventional Loan Terms
Conventional loans are available in fixed-rate or adjustable-rate (ARM) loans and have a term of 10, 15, 20 or 30 years. Those who are purchasing their first homes, an additional home or even investment property often turn to a conventional loan.
Conventional loans are perfect for homeowners who have funds available for a down payment and strong credit.