If you are looking for a mortgage with a wide selection of terms and competitive rates, conventional loans may be your answer. These loans are what most people think of when it comes to a traditional home loan. Conventional Home Loans are not part of a government-sponsored program, and are instead fully funded and insured by private lenders and insurers.
Ultimately, lenders individually decide who is and is not approved for a conventional loan. Borrowers should be prepared to supply at least two years of W-2’s, tax statements, bank statements and proof of cash reserves and submit to a credit report.
Clients should have good or better credit – at least a 620 or higher, and a low debt to income ratio.
For most conventional loans, a 20% down payment is required.
FHA loans are an awesome option when it comes to home financing. They have great benefits, such as a minimum of only 3.5% down payment. These non-conventional loans are secured by the Federal Housing Administration and are funded by private lenders.
FHA loans are a much more accessible financing option with lessened requirements and added benefits such as:
If you would like to make repairs to your existing home, FHA also offers 203(k) mortgages for home repair.