Discover the advantages of conventional mortgages: competitive rates, flexible terms, and accessible financing, simplifying your path to real estate success.
CONVENTIONAL
CONVENTIONAL LOANS
Discover the power of conventional loans: they offer steady rates, adaptable terms, and easy access to funds, enhancing your real estate journey.
LOAN PROGRAM DETAILS
Typical guidelines for Conventional loans.
Docs
Full
Credit Score
620
LTV
90%
Max Loan
$2 Mil+
Conventional Features
- Flexible loan terms
- Competitive interest rates
- Variable down payment options
- Low Down Payment
- Versatile usage
Conventional Benefits
- Stable monthly payments
- Widely accessible
- Potential for real estate investment
- Credit-friendly options
- Simplified application process
POPULAR CONVENTIONAL LOANS
Traditional
Prime
Fannie / Freddie
In today’s ever-changing financial landscape, the 30-year fixed mortgage remains a popular choice for homeowners seeking predictable payments and long-term stability. These loans are readily available in today’s market.
BENEFITS
-
680+ Fico
-
0-5% down payment
-
30yr, 15yr fixed
-
Full Doc
-
$726,000 – $1.396 mil
Big Loan Amounts
Prime Credit & Assets
Jumbo/Super Jumbo
Jumbo and Super Jumbo loans are a type of mortgage designed to finance high-value properties that exceed the conforming loan limit set by Fannie Mae and Freddie Mac.
BENEFITS
-
700+ Fico
-
10%-20% down payment
-
30yr, 15yr fixed
-
Full Doc w 12 Months Reserves
-
Loans to $3 Mil+
Traditional
Prime Credit & Assets
Investment & 2nd Homes
Investment and second homes can be a smart financial decision, but securing financing for these types of properties can be challenging.
BENEFITS
-
700+ Fico
-
10-20% down payment
-
30yr, 15yr fixed
-
Full Doc w 12 Months Reserves
-
Loans to $3 Mil+
Exploring Mortgage Loan Categories
and Programs
1. Conventional Loans
Fixed-Rate Conventional Loans
- Provide predictable monthly payments.
- Terms range from 10 to 30 years.
Adjustable-Rate Conventional Loans
- Initial fixed-rate periods followed by adjustable rates.
- Suitable for borrowers expecting changes in income.
Jumbo Conventional Loans
- Designed for high-value properties exceeding conforming loan limits.
- Require larger down payments and stricter credit requirements.
Conforming Conventional Loans
- Meet guidelines set by government-sponsored enterprises like Fannie Mae and Freddie Mac.
- Offer competitive interest rates and terms.
High-Balance Conventional Loans
- Tailored for properties in high-cost areas.
- Allow borrowers to access higher loan amounts while still benefiting from conventional loan terms.
2. Non-Qualified Mortgage (Non-QM) Loans
Bank Statement Loans
- Evaluate income based on bank statements rather than tax returns.
- Suitable for self-employed individuals with variable income.
Asset-Depletion Loans
- Consider assets as a source of income.
- Ideal for borrowers with substantial assets but limited income.
Interest-Only Loans
- Allow borrowers to pay only interest for a specified period.
- Useful for investors or those with irregular income streams.
Foreign National Loans
- Cater to non-US citizens or foreign investors.
- Offer financing options without requiring a Social Security Number.
Stated Income Loans
- Allow borrowers to state their income without providing extensive documentation.
- Suitable for individuals with non-traditional income sources.
3. Investor Loans
Fix and Flip Loans
- Provide short-term financing for property renovation and resale.
- Offer quick approval and funding to seize investment opportunities.
Rental Property Loans
- Designed for investors purchasing properties to generate rental income.
- Assess property cash flow to determine loan eligibility.
Portfolio Loans
- Allow investors to finance multiple properties with a single loan.
- Provide flexibility in terms and conditions.
Bridge Loans
- Bridge financing gaps between property purchases.
- Ideal for investors acquiring new properties before selling existing ones.
Hard Money Loans
- Asset-based financing with higher interest rates and shorter terms.
- Offer accessibility for borrowers with less-than-perfect credit.
4. Home Equity Line of Credit (HELOC)
Draw Period
- Allow borrowers to access funds as needed during the draw period.
- Interest-only payments required during this time.
Repayment Period
- Begins after the draw period ends.
- Borrowers repay both principal and interest during this phase.
Variable Interest Rates
- Interest rates fluctuate based on market conditions.
- Provide potential for lower initial rates but may increase over time.
Flexible Usage
- Funds can be used for various purposes, including home improvements, debt consolidation, or emergency expenses.
Credit Line Access
- Borrowers can access funds multiple times during the draw period, up to the credit limit.
CONCLUSION
Understanding the diverse landscape of mortgage loan categories and programs is essential for making informed decisions in real estate financing.
Learn more about Conventional loan options today!
FAQS
What is a conventional mortgage loan?
A conventional mortgage loan is a type of home loan that is not insured or guaranteed by the government, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Instead, conventional loans are offered by private lenders, including banks, credit unions, and mortgage companies.
What are the benefits of a conventional mortgage loan?
Conventional loans often offer competitive interest rates and flexible terms. Additionally, they do not require mortgage insurance if you make a down payment of 20% or more, potentially saving you money over the life of the loan.
What are the eligibility requirements for a conventional mortgage loan?
Eligibility requirements for conventional loans typically include a good credit score, stable employment history, and a debt-to-income ratio within acceptable limits. Lenders may also require a minimum down payment, which can vary depending on the loan program.
How much of a down payment is required for a conventional mortgage loan?
While down payment requirements can vary, conventional loans often require a down payment of at least 3% to 5% of the home’s purchase price. However, making a larger down payment can help lower your monthly payments and reduce the overall cost of the loan.
What is private mortgage insurance (PMI), and is it required for conventional loans?
Private mortgage insurance (PMI) is typically required for conventional loans when the borrower makes a down payment of less than 20%. PMI protects the lender in case the borrower defaults on the loan. Once the loan-to-value ratio reaches 80%, PMI can usually be canceled.
What are the different types of conventional mortgage loans?
Conventional loans come in various types, including fixed-rate mortgages and adjustable-rate mortgages (ARMs). With a fixed-rate mortgage, the interest rate remains the same throughout the life of the loan, providing stability and predictability. ARMs, on the other hand, have interest rates that can fluctuate over time.
Can I use a conventional mortgage loan to refinance my existing mortgage?
Yes, conventional loans can be used for refinancing existing mortgages. Refinancing can help borrowers lower their monthly payments, reduce their interest rate, or shorten the term of their loan. It may also allow borrowers to access their home’s equity for other financial needs.
How do I apply for a conventional mortgage loan?
To apply for a conventional mortgage loan, you’ll need to gather financial documents, such as pay stubs, tax returns, and bank statements, and complete a loan application. A lender will review your application, assess your creditworthiness, and determine the loan amount and terms you qualify for.
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