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Conventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but are secured by a private lender.
So what are the differences between a government insured loan and a conventional?
A conventional loan simply means that it is conforming to Fannie Mae and Freddie Mac guidelines. Fannie Mae and Freddie are government-sponsored enterprises that purchase mortgages from lenders and sells them to investors. Because the loans are not insured by the government the credit guidelines are strictor, requiring a minimum credit score of 620 and your debt to income ratio around 45%. If you are wanting some wiggle room in the amount of house you can purchase then you may want to consider going with FHA. Both programs can be a great way to purchase your home.
We want you to be confident that you are getting the best loan tailored for your specific needs and goals. The only way to achieve that is by going over your options with one of our professional home loan experts.
Call Us Today To Find Out MoreYes, first time buyers can get a conventional loan with only 3% down.
Conventional loans require a credit score of 620 or higher where FHA requires a 580 or above.
If you are not a first time buyer then you will need at least 5% of the selling price for a down payment. First time buyers can purchase a home with as little as 3% down on a conventional home loan.
Not necessarily, your interest rate is decided on a few factors, such as your credit score, DTI (debt to income ratio) and your LTV (how much down payment). It is not uncommom for FHA to offer a lower rate which is why it is best to have a professional mortgage specialist look at both scenerios for you.
The requirements for conventional home loans are a FICO credit score of 620 or higher, debt to income ratio typically no higher than 45%.
In the case of conventional loans you will need to typically wait at least 4 years after a court discharges your bankruptcy. After a foreclosure, it can take you 7 years before qualifying for a conventional loan. FHA is more forgiving and will approve a borrower 3 years after a foreclosure and 1 year after a chapter 13 bankruptcy and 2 years after a chapter 7 bankruptcy.
Effective January 2, 2022 the conforming loan limit is $647,200 for Deschutes, Jefferson and Crook counties.
You can obtain a conventional home loan on a manufactured home if it is at least a double wide, built no later than 1976 and attached to a permanent foundation on land owned by the borrower.
A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac.
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