Conventional mortgages are the preferred option for most borrowers with higher credit scores and income. Conventional mortgages can be used to purchase primary residences, secondary residences, and investment properties.
It’s possible for first-time home buyers to qualify with a down payment as low as 3%. However, the down payment requirement can vary depending on your personal situation and the type of loan (or property) you’re getting:
If you’re refinancing a conventional loan, you’ll need more than 3% equity. However, in every case, you’ll need at least 5% equity.
There are several ways that a conventional mortgage could give home buyers a head start over other buyers who have lesser qualifications.
Homeowners with good credit and funds for a larger down payment could avoid paying upfront mortgage insurance or paying monthly mortgage insurance like an FHA loan. Other advantages include:
Private Mortgage Insurance (PMI) is required for all conventional loans with less than 20% down. The cost for PMI will vary depending on your loan type, credit score, and down payment amount. PMI is generally paid as part of your monthly mortgage payment, but some buyers pay it as an upfront fee included in their closing costs – others will pay it in the form of a slightly higher interest rate.
This PMI will automatically fall off your monthly mortgage payment once you reach 22% equity in your home, or you can contact your lender to request the removal of PMI when you reach 20% equity in your home.
Other requirements for a conventional loan include:
Police Mortgage Conventional Loans qualify for Killed in the Line of Duty Loan Protection, a special debt cancellation benefit created exclusively for active, full-time Law Enforcement Officers.
Contact us to learn more about our Conventional Loans.
Chicago Office:
100 W. Randolph, 9th Floor, Chicago, IL 60601.
Springfield Office:
320 W. Washington, 3rd Floor, Springfield, IL 62786. | Phone: 888.473.4858
