What is a Conventional Loan, and is it right for me?
Conventional Home Loans, also referred to as A-Paper Loans, are traditional home loans with the strictest guidelines. They are usually only for those with Excellent credit and 20% saved for a down payment, or more than 20% equity established on your home. Conventional mortgages are a great option to purchase a home with and a great loan to refinance into, once you have the 20% equity. With 20% down or 20% equity, Conventional loans do not have mortgage insurance, which is the single biggest benefit of a traditional Conventional Loan. Conventional Loans are subject to industry loan limits.
Conventional Loans are the best option when you have
At least 20% Down
Conventional Loans carry no mortgage insurance when you put 20% down while purchasing. This can greatly reduce your payment!
Excellent Credit
Conventional Loans perform the best for clients with Excellent credit. Generally the best conventional loans are for borrowers with 720+ FICO score.
Low Debt-to-Income Ratio
Conventional Loans have strict income requirements. But if you fit into their mold, you can gain huge benefits in regards to interest rate.
Greater Than 20% Equity
Conventional Loans are great to refinance into when you have 20% or more equity. After hitting the 20% equity mark you can refinance.
Not sure if a Conventional Mortgage is for you? Or are you ready to start the process?
Either way, we are here to help. Set up a Free Consultation with one of our Loan Experts today, by clicking the button below!
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