Conventional Loans Near Me

What Is A Conventional Loan?

Conventional Loans are mortgages not backed or insured by any government agency like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Instead, these loans are offered by private lenders and follow Fannie Mae and Freddie Mac guidelines, the two government-sponsored enterprises that buy and guarantee conventional mortgages.

Conventional loans are popular among homebuyers who have good credit, stable income and can put more down. These loans offer flexibility and competitive rates, perfect for borrowers who don’t need the special programs available through government-backed loans.

Conventional Loan Features:

• No government backing: Loans are offered by private lenders without federal insurance or guarantees.
• Flexible loan terms: Borrowers can choose fixed rate and adjustable rate mortgage options.
• Credit score and down payment requirements: Conventional loans require a higher credit score and down payment than government-backed loans.

When Should You Get A Conventional Loan?

Conventional loans are for borrowers with good credit, stable finances and can meet the stricter qualifications compared to government-backed loans. Here are the common scenarios where a conventional loan might be the right fit:

1. Good credit borrowers: If you have a credit score of 620 or higher and a strong financial profile, you might qualify for the best terms with a conventional loan.
2. Those with larger down payments: If you can put down 20% or more, you can avoid private mortgage insurance (PMI) altogether which can save you money over the life of the loan.
3. Homebuyers buying higher value homes: Conventional loans can be used for higher loan amounts, making it a good fit for buyers buying homes that exceed FHA loan limits.

If you have the financial stability and creditworthiness to meet the requirements, a conventional loan offers many benefits, including better terms and lower overall cost.

Conventional Loan Benefits

Conventional loans offer numerous benefits for qualified borrowers, making it a popular choice for homebuyers across the country:

• Lower total borrowing cost: With a conventional loan, you can avoid paying mortgage insurance if you put down 20% or more. Even if you put down less, PMI can be removed once your equity reaches 20%, lowering your monthly payments.* Competitive rates: Conventional loans often have competitive rates, especially for good credit borrowers. You can also buy down your rate with points.
• No upfront mortgage insurance: Unlike FHA loans, conventional loans do not require an upfront mortgage insurance premium (UFMIP) which means lower closing costs.
• Flexible loan terms: Borrowers can choose fixed rate loans where the interest rate stays the same for the life of the loan or adjustable rate mortgages (ARMs) which starts with a lower rate and adjusts after an initial period.
• Higher loan limits: Conventional loans have higher loan limits than FHA loans, perfect for homebuyers in higher cost markets.

Conventional Loan Considerations

While conventional loans offer many benefits, they also have stricter qualification requirements than government-backed loans:

• Higher credit score requirements: To qualify for a conventional loan, borrowers typically need a credit score of 620 or higher, though higher scores get the best rates and terms.
• Larger down payment: Conventional loans require a down payment of 5% or more, though 20% or more helps you avoid PMI. Borrowers with lower down payments may get higher interest rates or additional fees.
• Private mortgage insurance (PMI): If you put down less than 20%, you’ll need to pay PMI which adds to your monthly mortgage payment. But PMI can be canceled once you reach 20% equity, unlike FHA loans where mortgage insurance lasts the life of the loan.
• Stricter debt-to-income (DTI) ratios: Lenders offering conventional loans have lower DTI ratio, typically under 43% meaning your monthly debt payments should not exceed 43% of your gross monthly income.
• Income and asset verification: You’ll need to provide detailed documentation of your income, assets and employment history to prove you have the financial stability to manage the loan.

Conventional loans are for borrowers who have good credit and finances but make sure you can meet the stricter standards compared to government-backed loan programs.

Is A Conventional Loan For You?

A conventional loan might be right for you if:

• You have good or excellent credit and want to take advantage of the competitive rates and terms for qualified borrowers.* You have enough savings for a bigger down payment, ideally 20% or more to avoid PMI.
• You’re buying a home that’s above the limits for FHA or other government-backed loans.
• You want more loan flexibility, such as the ability to choose between fixed rate and adjustable rate mortgage options.

Conventional loans offer more benefits for homebuyers who qualify, more flexibility and lower cost over time.

How to Apply for a Conventional Loan

Applying for a conventional loan involves stricter credit, income and asset requirements but Keyswag Lending is here to guide you through the process. We match qualified borrowers with the right conventional loan programs for their needs.

Here’s how we can help:

1. Initial consultation: We’ll review your financial profile, credit score, income and assets to determine if a conventional loan is right for you.
2. Loan program options: We offer various conventional loan programs, fixed rate and adjustable rate mortgages to fit your homeownership goals.
3. Income and asset verification: Our team will walk you through the process of gathering and submitting the required documents to qualify for the loan.
4. Streamlined approval process: Once your loan application is submitted, we’ll work with you to ensure a smooth approval process to get you into your dream home quickly and efficiently.

At Keyswag Lending, we help borrowers nationwide get access to competitive conventional loan options that fit their financial goals.

Ready to Get Started?

If you’re ready to explore conventional loans, contact us today for a free consultation. We’ll guide you through the process and get you the financing you need to achieve your homeownership dream.