A conventional mortgage is a type of loan that is not backed by a government agency for repayment and therefore requires better credit from its borrower (minimum 620).
As a result, it is often considered by lenders to be riskier than government backed loans (such as those from Fannie Mae and Freddie Mac) and typically has a higher down payment requirement and higher interest rates when compared to government backed loans (i.e. FHA Loans, VA Loans and USDA Loans.)
In today’s ultra-competitive world of real estate buying, home sellers lean towards accepting confirming loans from “conventional buyers” over “FHA or VA buyers”. This is because the requirements of a conventional loan suggest that the buyer has a higher credit score and more disposable funds available for the home purchase.
The minimum credit score for a conventional loan in Florida is 620, with most lenders requiring at least 5% of the purchase price down – and 10-20% down to avoid paying for private mortgage insurance.
There are also a variety of conventional loan programs such as First Time Home Buyer programs and Jumbo Loan programs that have differing requirements than a standard conventional loan.
For more information on conventional loans and how to obtain one, please contact a loan officer from The Wholesale Mortgage Firm today. We are here to help you every step of the way!
$0 with 10.1% Down**
* Down Payment Requirement Can be 3% in some scenarios for First Time Homebuyers
** $0 PMI Payment with less than 20% down payment limited to select scenarios and mortgage lenders
Getting a mortgage can be a challenging and time-consuming process… but we’re here to help you.
If you have questions or need guidance on how to proceed with getting pre- qualified for a mortgage or applying for a home loan, feel free to contact us directly:
Please complete the form and a member of our team will contact you and work on getting your pre-qualification letter out ASAP.