What is a Conventional Loan, and is it right for me?

Conventional Home Loans, also referred to as A-Paper Loans, are traditional home loans with the strictest guidelines. They are usually only for those with Excellent credit and 20% saved for a down payment, or more than 20% equity established on your home. Conventional mortgages are a great option to purchase a home with and a great loan to refinance into, once you have the 20% equity. With 20% down or 20% equity, Conventional loans do not have mortgage insurance, which is the single biggest benefit of a traditional Conventional Loan. Conventional Loans are subject to industry loan limits.

Conventional Loans are the best option when you have:

At least 20% Down

Conventional Loans carry no mortgage insurance when you put 20% down while purchasing. This can greatly reduce your payment

Excellent Credit

Conventional Loans perform the best for clients with Excellent credit. Generally the best conventional loans are for borrowers with 720+ FICO score.

Greater Than 20% Equity

Conventional Loans are great to refinance into when you have 20% or more equity. After hitting the 20% equity mark you can refinance and get rid of your mortgage insurance!

Low Debt-to-Income Ratio

Conventional Loans have strict income requirements. But if you fit into their mold, you can gain huge benefits in regards to interest rate.

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