CONVENTIONAL HOME LOANS
What is a Conventional Mortgage?
A conventional loan is the traditional home mortgage most Americans get when buying a home. It is a private-sector mortgage, meaning it is not guaranteed or insured by the government. Instead, it is available through banks, credit unions, and mortgage companies like Desert Canyon Mortgage.
Benefits of a Conventional Mortgage?
The benefits of utilizing a conventional mortgage are numerous.
Conventional Loan Characteristics
Down Payment: As low as 3%. Contrary to popular belief, the most common down payment is 5%, not 20%. However, when you put 20% down, it allows you to avoid mortgage insurance altogether.
Loan Options: There are fixed rate or adjustable rate options in loan terms ranging from 10, 15, 20, 25, and 30 years based on your specific goals and needs.
Property/Residency Types: Conventional mortgages allow for primary residences, second homes, and investment properties for 1-4 unit dwellings.
Mortgage Insurance: If the down payment is less than 20%, the mortgage payment will include mortgage insurance. This will be automatically removed when the equity of the home reaches 78% loan to value. The loan can also be refinanced to have the mortgage insurance removed if the value of the home has increased.
Ideal Candidates for a Conventional Loan
Borrower: First-time homebuyer, repeat homebuyer or investor. You may also include a co-signer if needed.
Credit score: Minimum credit score is usually 620 (depending on the lender) but the higher the credit score, the lower the interest rate and mortgage insurance.
Assets: A larger down payment allows for a lower monthly payment.
Next Steps to Getting a Conventional Mortgage:
If you believe you are eligible for a conventional mortgage, the next step will be booking an appointment with Desert Canyon Mortgage to start the homebuying process. We recommend reviewing our homebuying timeline and pre-approval document checklist before making an appointment. Once complete, click HERE to start the loan application process.