Conventional Loan Eligibility
A conventional loan tends to follow Fannie Mae and Freddie Mac guidelines. Banks and other financial institutions issue a conventional loan – sometimes referred to as ‘regular loans.” A conventional loan is privately backed – unlike the government-issued FHA, VA and USDA loans. Because it’s the banks that put their “necks on the line,” guidelines and eligibility requirements tend to be more stringent than some of the federal loan programs.
There are many advantages for those that qualify for a conventional loan. Call (916) 371-6300 to learn more about why a conventional loan might be right for you.
Below are some of the general eligibility requirements of a conventional loan. Because each case is different, make sure to call us to determine if you qualify.
- Credit scores
Guidelines will vary – please contact me for details.
- Income requirements
Your mortgage payment cannot be more than 31% of your monthly gross income and your monthly debts (house, car, student loans, etc.) cannot exceed 45% of your monthly gross income.
- Down payment
Most loans require between a 3% and 20% down payment. Mortgage insurance may be an option for those who cannot put down the full 20%.
You’ll need to provide proof of your:
- income stability
- job history
- residences from the past two years
- income tax filings
(This is just an initial list of paperwork that will need to be provided. Based on your income, assets, liabilities and profits more paperwork may be requested.)
Also, if you are not a U.S. citizen, residency or visa paperwork may be required.
Why such a big process to apply for a conventional loan?
If you think about it – the banks are taking a big risk to loan you enough money to buy a house. They receive thousands of applications each week from hopeful homeowners and investors requesting to borrow funds. To determine who is likely to repay the loans, the banks must set eligibility requirements. Unlike the FHA, VA loans and USDA loans that are backed by the government, there is more risk to the private lenders when they issue a conventional loan. Therefore, stricter guidelines apply.
While a conventional loan may have the strictest eligibility guidelines, they often prove to be the most advantageous loan option for those who qualify.
The conventional loan experts at Leader One will be with you step-by-step to walk you though the process. If there is any way that you may be eligible for a conventional loan, they will make it happen.
To learn more and see if you meet conventional loan eligibility requirements, contact me at (916) 371-6300.
Lori and team answered all of our questions, got us the best possible rate, and were professional. We are very happy with their service and would not hesitate to use them again.
Lori and her team were phenomenal in all areas!! Loved our communication, loved the rate that we got locked, everything was sooo easy peasy!! All little challenges with swiftly navigated; I honestly can not say enough about how much I enjoyed having Lori and her team be my loan pros for my refi. I shopped around; and hands down she gave me the best deal I could have ever found! The best part is she is part of my awesome community, and it was great to work with that I know and admire in my community!
We have now completed two new loans and two refinances with Lori. She is always on top of her game, providing numerous options to help us determine what will best work for our situation. Lori is responsive, attentive, helpful, and patient. Thank you as always for your help and service, Lori! 2020 update: Lori is responsive, professional, and efficient. Our latest mortgage with Lori (a refinance) was remarkably easy to close.
Lori and her provide world class service throughout the loan process. They were ready and willing to answer any questions throughout the process and provided daily updates.
SUPER EASYsuper smooth transaction. Website for you to upload what you need. Lori almost knocked our APR in half. Also the price to refi was almost half of what we were charged on our last refi. Lori is so easy to work with. If you done a refi before you know how things can go.
Lori and her team were extremely professional, informative, and friendly. They walked me through every step of the process and answered all my questions, got everything done faster than I had thought possible. So happy with my decision and the results! Would recommend to everyone!
I purchased a home and completed a refinance with Lori, and she and her team make the process seamless. I will definitely call Lori for my future loan needs!
Lori and her team were patient and always answered my questions quickly. They took all the time I needed to feel comfortable every step of the process
Lori was amazing to work with. She was on top of everything and extremely helpful thorough this home buying process! She helped us do a 21 day close. I would recommend her to any one wanting to purchase a home.
From start to finish a great experience. The technology was very easy to navigate and the follow through was great. There was consistent communication throughout the process.