A traditional fixed rate conventional mortgage is the most popular mortgage in America.
Low down payment options
- We offer mortgage solutions to help you purchase your next home with as little as a 3% to 5% down payment for primary homes.
Take advantage of favorable loan terms
- Conventional loans reward you for your good credit with lower interest rates, more affordable fees, and the ability to reduce or even remove private mortgage insurance premiums.
What is a Conventional Loan?
A conventional loan is one of the most common types of mortgage loans available. These mortgage loans adhere to strict GSE guidelines. One of these guidelines is the maximum size of the loan. The 2019 conforming loan size limit is $484,350 for a single-family residence in the continental US. However, it is possible to obtain a larger or smaller loan. Below are some examples of conforming loans. Read on to learn more.
While the credit score required is higher than for a USDA or VA loan, the interest rates will be lower than for these loans. If you have a good credit score, you have a better chance of qualifying for a conventional loan. You may need to pay private mortgage insurance to qualify for a conventional loan. Typically, you will need to put 20% down payment or equity in your home. Once your credit score has improved, you will have a much easier time getting approved for a loan.
If you have excellent credit and sufficient income to meet the monthly payments, you can probably qualify for a conventional loan. However, some lenders are more flexible and will consider borrowers with less than stellar credit. Generally, a low credit score will require a higher down payment or a smaller monthly income. In this case, a conventional loan is the best choice. It has many advantages, and you’ll be able to finance a home of your dreams.
What are the requirements for Conventional Loans?
Conventional loans have specific requirements for your income, assets, and credit. Ideally, your debt-to-income ratio (DTI) would be less than 43%, with some exceptions based on compensating factors up to 50%.
In addition to your down payment funds and loan costs, certain conventional loan programs require you to have liquid assets available, called reserves. Typically, these are equal to a number of months of your housing expenses (including principal, interest, taxes and insurance). Loans for second homes and investment properties are more likely to have substantial reserve requirements of 6 to 24 months.
Many conventional loan programs have minimum credit score requirements of 620 or better, while the best pricing is reserved for higher scores.
Why consider a Conventional Loan?
With our conventional loans we are able to offer some of the most competitive pricing for our clients with above-average credit scores, larger down payments on their home purchases, or those with equity in their homes on refinances. Contact a Arizona Lending Group rep today to walk you through the loan process!
Let Arizona Lending Group Assist You With Your Conventional Loan!
Our experienced mortgage professionals will review your complete financial profile, including your income, assets, and credit to make it simple & easy.
Mortgage Broker in Scottsdale, AZ
“ARIZONA LENDING GROUP, INC., AZ MB-1023670 & NMLS 2137491. THE PRINCIPAL AND INTEREST PAYMENT
ON A $203,500 30-YEAR FHA FIXED-RATE LOAN AT 2.625% AND 96.5% LOAN-TO-VALUE (LTV) IS $974.31. THE
ANNUAL PERCENTAGE RATE (APR) IS 3.703% WITH ESTIMATED FINANCE CHARGE OF $5,600. PAYMENT
INCLUDES A ONE-TIME UPFRONT MORTGAGE INSURANCE PREMIUM (MIP) AT 1.75% OF THE BASE LOAN
AMOUNT AND A MONTHLY MIP CALCULATED AT 0.85% OF THE BASE LOAN AMOUNT. THE 0.85% MONTHLY
MIP IS REQUIRED FOR A SPECIFIC PERIOD OF TIME REGARDLESS OF YOUR DOWN PAYMENT OR EQUITY IN
YOUR HOME. THE PRINCIPAL AND INTEREST PAYMENTS, WHICH WILL CONTINUE FOR 360 MONTHS UNTIL
PAID IN FULL, DO NOT INCLUDE TAXES AND HOME INSURANCE PREMIUMS, WHICH WILL RESULT IN A HIGHER
ACTUAL MONTHLY PAYMENT. RATES CURRENT AS OF 10/26/2021. SUBJECT TO BORROWER APPROVAL.”