Conventional

  • 30-year fixed
  • 25-year fixed
  • 20-year fixed
  • 15 year fixed
  • 10-year fixed
  • 10-yr arm
  • 7-yr arm
  • 5-yr arm
  • Fully Amortizing
  • NO Interest Only

CONFORMING LOAN LIMITS ARE:

1-unit $424,100 | 2-units $543,000 | 3-units $656,350 | 4-units $815,650


When you hear an advertisement quoting mortgage rates on tv or radio, unless otherwise stated the rate is based on a conventional loan with a conforming loan amount. Conventional loans follows strict Fannie Mae or Freddie Mac guidelines, such as minimum allowable credit scores, income requirements and minimum down payments. A conventional loan can be conforming or nonconforming and have either a fixed or adjustable rate. Both Fannie and Freddie guidelines are similar but have some key differences. Furthermore, each lender may have their own overlays and interpret the guidelines differently. So while one lender may decline your loan, another may approve it.

A likely applicant would have:

  • a credit score of at least 620 (660-680 preferred)
  • at least  a 5% down payment and at least two months cash reserves in savings
  • at least 20% equity in property when refinancing
  • Borrower with two year job history and a debt-to-income ratio below 43%
  • a loan amount within the conventional loan limits

Advantages

    • No mortgage insurance required (with 20%+ down payment)
    • Private mortgage insurance (for loans over 80%)  is removed once the property reaches a 78% loan-to-value ratio
    • Offers lender-paid mortgage insurance which can greatly reduce your payment and increase your ability to qualify for higher loan amounts
    • Makes for a stronger purchase offer than FHA or VA

Disadvantages

      • More restrictive debt-to-income ratios
      • Minimum credit score required higher than FHA or VA loans
      • Restrictions on gift funds for down payment and closing costs
      • Interest rates are typically higher than that of FHA or VA loan

High Balance Conventional

There is another tier of loan limits in the conventional loan family; these are referred to as “high-balance.” These loans fall between the conforming loan amount limit and the higher priced Jumbo loan amounts. Like all conventional loans these adhere to Fannie Mae or Freddie Mac guidelines. However, because of the higher risk, these loans tend to have more restrictive loan-to-value limits as well as slightly higher rates than conforming loans.

HIGH BALANCE LOAN LIMITS VARY BY COUNTY.  IN HIGHER PRICED COUNTIES THEY ARE:   (check your county)

1-unit $636,150 | 2-units $814,500| 3-units $984,525 | 4-units $1,223,475

Conventional Loan Checklist

When you’re applying for an Conventional loan, the following list of documents will help expedite the process. We can help you understand any part of the FHA loan process so don’t hesitate to contact us with any questions.

Employment Info

  • Past two years’ completed tax returns.
  • Past two years’ W-2s, 1099s and any other necessary tax forms.
  • Most recent 30-day’s pay stubs.
  • Self-employed borrowers need 2 years’ tax returns and YTD Profit & Loss Statement.

Savings Info

  • Past two months’ full bank statements for all accounts.
  • Most recent statements from investment accounts (retirement, 410k, mutual funds, etc.).

Personal Info

  • Driver’s License or other official state identification.
  • Any Divorce, Palimony, Alimony documents showing financial obligations
  • Green card or work-permit (if/as applicable).