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LET'S GO CONVENTIONAL!
If you have good credit, a steady income, and can afford the down payment, our Conventional loan programs offer great rates and faster closings in most cases. So if you fall into this category and are ready to move forward, let's get started today!Show Less
LET'S GO CONVENTIONAL!
If you have good credit, a steady income, and can afford the down payment, our Conventional loan programs offer great rates and faster closings in most cases. So if you fall into this category and are ready to move forward, let's get started today!
Is a Conventional loan the right one for me?
Conventional mortgages can have a fixed interest rate or an adjustable interest rate. Typical fixed-rate loans have a term of 30 or 15 years. However, Sun American Mortgage also offers 25-year, 20-year, and 10-year fixed-rate options.
Conventional mortgages typically require a higher down payment, usually 5%–20%. However, first-time homebuyers can now purchase a home with as little as 3% down!
What are the benefits of a Conventional Mortgage?
What are the requirements for Conventional?
Unlike FHA or VA loans, conventional loans are not insured by the federal government, though borrowers are required to purchase private mortgage insurance if they pay less than 20 percent for the down payment. Conventional mortgage qualification is relatively straightforward if you have a decent credit score, financial stability and the required down payment. An FHA loan might be a better option for homebuyers who have minimal credit history, or a lower credit score. Although it is possible to obtain a conventional mortgage under these conditions, interest rates and private mortgage insurance costs might be higher than for FHA loans.
We guide you through every step along the way!
To qualify for a conventional mortgage, you will need to provide up-to-date, accurate documents that prove your financial stability. These include bank statements from the past two months, recent pay stubs, W-2 forms and tax returns from the previous 2 years. If you are self-employed, you should also gather business tax return information for the past two years.
Debt-To-Income Ratios (What is this?)
An important aspect to qualifying for a mortgage is your “total debt to income ratio”….what is that? To calculate your debt to income ratio, add up all monthly debts, such as car loans, student loans and child-support payments, as well as your future mortgage payment. Divide the sum by your monthly gross income. If the result is more than 0.44, or 44 percent, it may be beneficial to either wait to apply for a conventional mortgage or choose an FHA loan instead.
This is one of the two debt to income ratios that lenders consider during the mortgage application process. To calculate your housing ratio, simply divide your potential monthly mortgage payment — principal, interest, taxes, insurance and HOA dues if applicable — by your gross monthly income. Most conventional lenders prefer that borrowers have a housing ratio of less than 28 percent, or 0.28. If your result is higher than 0.28, you might have difficulty qualifying for your conventional loan.
Generally, conventional borrowers put anywhere between 10-20% down, which means a smaller loan amount and a lower interest rate with good credit. However, there are programs that only require 3-5% down and still provide favorable rates and requirements.
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