A conventional loan is a home loan for individuals who have steady income, good credit and have funds available for a down payment. A conventional loan requires as low as 3% down payment. Harrison Lending Group team in McAllen, Texas helps buyers secure a conventional loan when purchasing property.

A conventional loan is not insured by the federal government (like USDA, FHA and VA loans) and can be the preferred route to home financing for many homebuyers and those purchasing investment property.

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Pre-qualify for a Conventional Loan today!

 

Applying for a Conventional Loan

Typically, a conventional loan requires that borrowers have 3-20% of the home's value as a down payment. Lenders who sell conventional loans review debt/income ratios and monthly housing costs. Also reviewed in the conventional loan application are credit scores, credit history and income over the past several years. Those who have gone through bankruptcies and foreclosures at least four years ago are eligible for a conventional loan but must have excellent credit histories. Most loan programs review each applicant based on the Fannie Mae and Freddie Mac guidelines.

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Typically, we will review the following items with you when applying for a conventional loan:

• Your Employment (Is your income and employment steady?)

• Down Payment (How much can you afford to put down?)

• Credit History (Is your credit good, do you have late payments?)

 

In addition, we can discuss your options for mortgage insurance and setting up an escrow account, which will allow you to have your mortgage insurance, homeowner’s insurance and property taxes taken out as part of your monthly mortgage payment.

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Learn about the Home Buying Process from Fannie Mae, and then get preapproved for a conventional loan from Harrison Lending Group team in Texas!

 

Conventional Loan Terms

 

Conventional loans are available in fixed-rate or adjustable-rate (ARM) loans and have a term of 15, 20 or 30 years. The shorter the term, the lower the rate. Those who are purchasing their first homes, an additional home or even investment property often turn to a conventional loan.

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Conventional loans are perfect for homeowners who have funds available for a down payment and excellent credit. The application process goes quicker than FHA loans or VA loans since the government isn't involved in the application process. Homeowners with conventional loans also find their equity builds up quicker since a larger down payment is needed.

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To see if you pre-qualify for a Conventional home loan, contact Harrison Lending Group team in Texas ,

NMLS 1625401 today at 956-630-7346.

 

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 956-630-7346 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%.

• Documentation
  You’ll need to provide proof of your:

  • W-2 for the past 2 years

  • Residence from the past 2 years

  • 30-day paystubs

 

(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 Harrison Lending Group will be with you step-by-step to walk you through the process. If there is any way that you may be eligible for a conventional loan, they will make it happen.