Guidelines for Conventional Loan

1. Guidelines for Conventional Loan Mortgage Miracles Anyone who has ever applied for a mortgage knows there are minimum requirements they must meet to qualify. And while we’d love to help any and everyone who walks through our door, those guidelines are standard and specific, and lenders can’t bend them or make exceptions. These conventional loan guidelines were created by the government and are enforced to protect the lender, borrower, and investor. For lenders, the guidelines help to prevent them from approving loans that are too high risk. For borrowers, the guidelines help to prevent you from taking on a loan you can’t realistically pay back. Since we primarily work with conventional loans here at Mortgage Specialists, keep reading to learn what is required to qualify.

2. Conventional loans are a little harder to qualify for than their government-insured counterparts like FHA and VA loans. To qualify, you will need to meet all the minimum requirements below: Credit Score Borrowers need a minimum credit score of 620. And while that’s the minimum, keep in mind that with a higher credit score, you can obtain a more favorable interest rate. Income You will also need proof of steady employment for the past two years and generally a debt-to-income ratio of 43% or less. Down Payment A down payment of at least 3% is required for first-time home buyers and 5% for everyone else. If you plan to put less than 20% down, expect to pay for private mortgage insurance (PMI). Your PMI fees can add up to .10-1.95% of your loan balance each year. As we touched on above, these are the minimum requirements. If you take the time to raise your credit score, pay down debt, or save money for a larger down payment prior to purchasing, you will likely qualify for a much better interest rate. And trust us, you want a better interest rate – it can save you tens of thousands of dollars over the life of your loan. Contact us: www.wedohomeloansforyou.com UTAH: 298 24th Street, STE 435A Ogden, UT 84401