Conventional Loans
Calculator Disclaimer
Results received from this calculator are designed for comparative purposes only, and accuracy is not guaranteed. Carbon Capital Mortgage Group does not guarantee the accuracy of any information or inputs by users of the software.
This calculator does not have the ability to pre-qualify you for any loan program which should be verified independently with one of our Loan Consultants. Qualification for loan programs may require additional information such as credit scores and cash reserves which is not gathered in this calculator. Information such as interest rates and pricing are subject to change at any time and without notice. Additional fees such as HOA dues are not included in calculations. All information such as interest rates, taxes, insurance, PMI payments, etc. are estimates and should be used for comparison only. Carbon Capital Mortgage Group does not guarantee any of the information obtained by this calculator.
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Overview
Most simply stated, a conventional loan means a homebuyer’s mortgage is not backed or insured by a government agency such as the Federal Housing Administration (FHA) or Veterans Administration (VA). Buyers can use a conventional mortgage to purchase a one- to four-unit home, a condominium, modular or manufactured home as a primary, secondary or investment property.
Many of the conventional loans we provide have better interest rates than “nonconventional” loans that are insured by the federal government. Your unique rate depends upon a few factors, including your financial history, credit score and income. We work with several lenders to offer competitive rates to you. The down payment of a conventional purchase loan is generally higher than that of a government-insured loan, such as an FHA loan, which is 3.5%. Conventional borrowers generally must pay between 5% to 20% percent of a home’s purchase price for a down payment. On a refinance, a conventional loan can have a loan-to-value (LTV) ratio as high as 95% with the addition of private mortgage insurance (PMI) or lender paid mortgage insurance (LPMI).
Conventional Loans with Options
There are two types of conventional loans: Conforming and nonconforming. A “conforming” loan falls within the lending limits set through lending giant companies Fannie Mae and Freddie Mac. They contrast with “jumbo” or “nonconforming” loans, which exceed lending limits (usually around $420,000 or more). Conventional loans – both conforming and nonconforming – may have fixed or adjustable interest rates, meaning mortgage payments are set at a certain amount for the life of the loan, or may vary as time goes on. At , Nu Vision Lending Inc. we provide both conforming and nonconforming conventional loans.
Debt to Income
On a conventional loan, we will consider a buyer’s debt-to-income (DTI) ratio, which is determined by calculating the projected housing costs and actual recurring monthly expenses. A buyer’s home expenses include: monthly loan payment applied toward principal and interest, property taxes, mortgage and homeowners insurance in addition to all monthly expenditures, must not exceed 43% of the buyer’s income.
FICO
Credit score of 640 and higher increases a borrower’s rate of approval and may reduce the loan’s interest rate.
Bankruptcy
Borrowers who have filed a Chapter 7 bankruptcy case can apply for a conventional mortgage after four years from discharge date, and those who have filed a Chapter 13 may apply two years after the re-establishment of an active credit profile.
Interest Rate
The current market and the borrower’s FICO credit score influence the interest rate he’ll receive on a conventional loan. Conventional loan programs at a fixed rate, where the interest rate stays consistently the same throughout the term of the loan, or as an ARM, an adjustable-rate mortgage, where interest rates initiate at a below-market rate and change on a designated schedule, which ranges from monthly to annually or longer.
Appraisal Impact
Conforming conventional loans have a maximum loan limit set by Fannie Mae at the county level. In the case of non-conforming loans, banks generally set the limit at 80 to 90 percent of the home’s appraised value
Find the right mortgage broker for your new house
Our clients enjoy the high level of customer service we provide throughout the entire process of applying for and purchasing a home. We work with clients of all types, who are looking for different term lengths (30, 20, 15 or 10), different loan amounts (even jumbo loans), and different rates. We offer fast pre-approval for loans that big banks simply can’t push through as fast. We have worked in the State of Florida for a long time, and we know the market here. Contact us to get started on your journey to purchase a home today.
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