Conventional loans are mortgage loans offered by non-government sponsored lenders. A conventional, or conforming, mortgage adheres to the guidelines set by Fannie Mae and Freddie Mac. It may have either a fixed or adjustable rate.
While many think that a 20% down payment is required for all conventional loans, this is no longer true. Conventional loans start out with as little as 3% down payment.
Some of the first-time homebuyer programs also offer lower mortgage insurance premiums making it more affordable for those purchasing their first home. By the way, a first-time homebuyer is one that has not owned a home in the past 3 years.
The minimum credit score for conventional loan programs is usually a 620 FICO or above. This is a bit stricter than FHA and VA financing.
Conventional mortgage loan requirements state that if you have been discharged from a Chapter 7 bankruptcy for four years or more, you’re eligible to apply. If you’ve had a Chapter 13 bankruptcy, you must document that your credit reputation has been re-established for at least two years.
One of the first things I will determine when pre-qualifying a borrower is which loan program is best for you. Whether it be Conventional, FHA, VA, etc. I will take the worry out of the equation and make sure you get the best possible loan for your specific situation!