Conventional Mortgage
Our Loan Specialists will help you evaluate all your choices. We’re experts at finding you the best options and values
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Apply nowHow Does a Conventional Mortgage Work?
The main benefit of a conventional home loan is the efficiency of the process compared to other options. Usually, though not always, conventional loans see a quicker closing date than VA loans, FHA loans, or USDA loans, which typically take longer to process than conventional loans do. There are two main types of conventional loans: conforming and jumbo. Conforming loans are for amounts of up to $647,200, and jumbo loans for $647,200 and more. With conforming loans, your credit score affects the interest rate you will pay, and with jumbo loans, your credit score determines whether you can obtain the mortgage. Unfortunately, jumbo loans also typically require more documentation and underwriting, so they can take longer to close on.
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Securing financing very quickly- Conservation of capital/no big down payments
- Properties that need renovation and don’t qualify for traditional loans as is – perfect for fix and flip loans.
- Securing financing very quickly
Requirements for a Conventional Loan, The Down Payment
While some buyers will be able to get away with a down payment of only 3% of the total purchase price, the size of your down payment depends greatly upon several factors. If it’s not your first time buying a home and you are within the 80th percentile of household income for your area, a 5% down payment will be needed. If you purchase a multi-unit property, the down payment required may be as high as 15%. A minimum down payment of 10% is required when purchasing a second property. Finally, a 5% minimum down payment is required if you secure an adjustable-rate mortgage. As far as equity is concerned, if you’re refinancing your home with a conventional home loan, you’ll need at least 3% equity. All other conventional mortgages require at least 5% equity, while cash-out refinancing may require 20%.Private Mortgage Insurance Policy
If your down payment is less than 20% of the total loan amount, you’ll need to purchase private mortgage insurance. Insurance policy isn’t so much for you but for the loan lender if you default on your loan. Its cost depends on your credit score, the down payment, and the loan type. While some buyers prefer to spread out the cost of the policy over their monthly mortgage payments, others like to cover it with a slightly bigger fee at closing. Still, others would instead take a slightly higher interest rate to cover the costs. But no matter how you choose to pay the premium, the insurance policy will be canceled once you have reached at least 20% equity in the property.
Fill Out Our Super-Simple Application™ Today!
We make it easy for people Nationwide to apply for a conventional home loan. Our Super-Simple Application™ takes less than 3 minutes to complete. Once you’re done, one of our Loan Specialists will get in touch with you. Our experienced and knowledgeable Loan Specialists will help you choose the right conventional home loan for your needs. We aim for 100% customer satisfaction, whether it’s for conventional mortgages or anything else.
Fill out the application today and get started on the path toward purchasing your dream home!
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Armed with all the facts of your circumstance and situation, we work with you to structure the best financing fit for you.
- The Conventional mortgage is the most common type of home mortgage loan and usually offers the lowest monthly payment.
- Conventional mortgage terms are usually 15, 20, or 30 years, however, terms for as few as 8 years are available.
- Down payments on conventional mortgages can be as low as 3%, but if your down payment is 20% or more, you will not have to purchase private mortgage insurance (PMI) and save even more on your monthly payment.
- If you plan on living in the home for only a few years, an Adjustable Rate Mortgage (ARM) can lock in the lowest interest rate for the initial fixed-rate period.
- If you plan on living in the home for 7 years or more and are looking for stable monthly payments, a Fixed-Rate Mortgage is likely your best bet.
Proof of Income
Depending on the lender and type of loan, you may be required to provide things such as one month’s worth of pay stubs, two years’ worth of federal tax returns, two years’ worth of W-2 forms, and quarterly statements for any other assets you have, such as investment accounts.
Are you looking to finance a home? Do you have good credit? With a streamlined application process and reasonable monthly payments, a conventional home loan may be the right option. Arab Gateway Funds Lending helps people Nationwide make their dreams of homeownership comeDocuments Needed For All Loans
- A copy of your current Drivers License Card
- Most recent Full credit report
- Most recent 60 days worth of bank statements. (If using retirement funds, please provide terms and conditions of withdrawal)
- Most recent 2 years W-2’s (please provide signed and dated Year-To-Date Profit and Loss statements if self-employed)
- Most recent 2 years IRS tax returns (both personal and business, all pages, all schedules please)
We Carefully Balance Opportunity & Responsibility with Credibility & Transparency ™
- Copy of the fully executed purchase contract (signed by all parties)
- A copy of the cleared earnest money check or money order
- Copy of your option money check
- Homeowner’s Insurance Company contact information