Conventional mortgage loans are also known as conforming loans because they must conform to the guidelines set by the Federal National Mortgage Association (Fannie Mae) and/or the Federal Home Loan Mortgage Corporation (Freddie Mac).
Generally, conventional loan guidelines are stricter than other home loan programs. This makes them a great option for homebuyers who have strong credit. Down payment requirements vary, but some loans can require a sizable down payment.
At Chris Doering Mortgage, we help homebuyers decide which home loan program is right for you. To speak to one of our loan experts about conventional loans in Gainesville, Florida and the surrounding area, call Chris Doering Mortgage today.
Conventional Loan Requirements
There are three basic requirements to qualify for a conventional loan. All three requirements prove that the buyer is financially stable and responsible. Your application will be evaluated based on the following:
A conventional loan requires a sizable down payment in comparison to other home loan programs. The larger the down payment contributed, the lower the monthly payments of the mortgage will be. Although more is required up front, borrowers will save more money with a conventional loan than other loan programs in the long run.
Your credit score will be a heavily weighted factor in your application for a conventional loan. Conventional loans require a higher credit score than other home loans. A higher credit score will result in lower interest rates for the borrower.
Applicants will be required to show proof of steady earning to qualify for a conventional loan. Be prepared to bring in the following documentation:
- 1 month of pay stubs
- W2 form
- Offer letter, if not yet started
- Diploma, if a recent graduate
Why Choose a Conventional Loan?
Many homebuyers are interested in conventional loans because they offer benefits that you may not receive with other loan programs. Here are a few that you could enjoy with an FHA loan:
- No monthly insurance. With down payments of at least 20%, you will not need to make monthly insurance payments. Your insurance is cancelable once your home equity reaches 20%.
- Competitive interest rates. Excellent credit requirements result in better rates. Call Chris Doering Mortgage to learn about Florida’s interest rates.
- Flexible terms. There are a variety of repayments plans for a conventional loan. Different repayment terms offer more competitive interest rates.
How to Apply in Florida
If you think you may be eligible for a conventional loan, call Chris Doering Mortgage, located in Gainesville, Florida. We are home buying experts and can help you every step of the way when purchasing a new home.
To learn more about conventional loans and how you can apply, contact us today!