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.
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Yes, 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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