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 610-345-9100 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 610-345-9100.
We highly recommend The Ken Pitts Mortgage Team. Ken and his team were very helpful, honest, and highly dedicated on making sure the process went as smooth as possible. They were always available when we needed them for any questions or concerns regarding the mortgage application, paperwork, or forms that needed to be filled out. What a great team they are! We just can’t thank them enough for everything they did for us!
Ken Pitts is the best mortgage broker around! He is sincere and loyal to his clients. Ken helped us buy our home in 2018 and then assisted us with a Refinancing Loan in 2019. We're blessed to know him, and would recommend him to family, friends, etc! Thanks for everything, Ken! :-) ~The Hiester Family
Ken (along with his team) has been my go-to lender since I bought my first home in 2015. I just sold and purchased my second home last week and through the entire process Ken was super helpful. He answered every question I had with a very quick response time. He crunched my numbers every single time something came up within minutes of me reaching out to him. He was so insightful to learning how much was affordable and what numbers we had to hit or couldn't go below. Ken keeps you informed the entire time on the mortgage approval process and guided me through every step. I would highly recommend Ken and his team. I can't say enough or put into words how much Ken helped make buying a home less stressful and seamless. If you are looking for a smart, detail-oriented, informative, insightful, helpful, knowledgeable lender, Ken is your guy.
Ken and his team were organized, responsive, and always available. He made our financing process smooth from pre-approval to closing. He was able to prepare both a construction/rehab pre-approval and also conventional financing for our home purchase.
We were first time home buyers and it was very scary territory! The second I walked into Ken office Kim made me feel so comfortable! Ken was so great at explaining everything to use and him and Jackie were so thorough and professional! The whole team is so great I would recommend them to anyone!
Ken and his team we awesome to work with. You all made this process so easy. Thank you for all you did to make our dreams come true. I will recommend them to everyone I know.
Ken and his colleagues were very easy to work with to finance the purchase of our new house. Everyone was friendly and efficient and Ken was a great resource for questions about the process. He was able to get our pre-qualification letter out the same day we needed it. Once we were under contract, at his recommendation, we locked in our rate at a great time and there was no drama in the closing process. We were able to do all the paperwork online--no messing with fax machines or dropping physical papers off anywhere. We would definitely work with Ken again.
Ken and his team are a pleasure to work with! He was always happy to help and answer any questions we had and keeping in contact every step of the way.
We only had just over a month for have our loan ready. Ken assured us it would be ready. From start of the process to the closing, the process was seamless. Ken's team was efficient, knowledgable and helpful the enter time. They assisted us with everything that was needed and kept us informed the entire time. I would recommend Ken and his team to anyone needing a mortgage.
Ken and his team have been great throughout my house purchase. They are always available and help you understand every step of the process. I would highly recommend!