Requirements For A Conventional Home loan

Source: Fannie Mae or Freddie Mac

* Minimum 640 Credit Score
– We will look at your credit from all 3 credit reporting bureaus and use the middle of the 3 scores. For example if you have an Experian score of 725, a TransUnion score of 700, and and Equifax score of 715, you’re credit score for qualifying purposes will be 715. If there is a co-borrower the lower of the two middle scores will be used for qualifying.

* Minimum 3% – 5% Down Payment
– You must have a minimum down payment of 5%. For example a 5% down payment on a $200,000.00 home is $10,000.000
– The down payment can come from gift funds *** restrictions apply***.
– Your down payment can be 3% if you are a first time home buyer. (A first time home buyer is someone who has never purchased a home before or has not owned a home in the past three years)

* Up to 3% in Seller Concession
– The seller can contribute 3% of the purchase price to help cover your closing costs. Closing costs are things like lender fees, title fees and recording fees.

*Mortgage Insurance
– Conventional Loans require mortgage insurance unless you put 20% down. The rate is set by a combination of your credit score and Loan to Value. Mortgage insurance will go away once you hit 78% Loan to Value.

* No Mortgage Insurance Option.
– Some people may choose to avoid PMI (private mortgage insurance). You can avoid this by financing in the cost of the Mortgage Insurance by choosing a higher interest rate.
* Debt to income ratio must not exceed 45%
If it looks like you might meet these criteria then contact us to get Pre-Approved for your loan and start your home buying process!