Can you get a 100% conventional loan?

Can you get a 100% conventional loan?

As someone who's been in the mortgage industry for over a decade, I can tell you that getting a 100% conventional loan isn't easy. In fact, it's pretty rare these days. But that doesn't mean it's impossible. Let's dive into the details.

What is a conventional loan?First of all, let's define what a conventional loan is. A conventional loan is a mortgage that is not insured or guaranteed by the government. Instead, it's backed by private lenders like banks and credit unions. Conventional loans are the most common type of mortgage, and they come in two main varieties: conforming and non-conforming.

Conforming vs. non-conforming loansConforming loans are called "conforming" because they conform to the guidelines set forth by Fannie Mae and Freddie Mac, the government-sponsored entities that buy mortgages from lenders. These guidelines include things like loan amount limits, down payment requirements, and credit score minimums. Non-conforming loans, on the other hand, do not conform to these guidelines and are typically harder to qualify for.

Can you get a 100% conforming loan?Now, back to the original question: can you get a 100% conventional loan? The answer is yes, but it's not easy. Here are a few things to keep in mind:

• You'll need excellent credit: To qualify for a 100% conventional loan, you'll typically need a credit score of at least 740.
• You'll need low debt-to-income ratio: Lenders will also look at your debt-to-income ratio (DTI), which is the percentage of your monthly income that goes toward paying off debt. If your DTI is too high, you may not qualify.
• You'll need to meet income requirements: Lenders will also look at your income to make sure you can afford the mortgage payments.
• You may need to pay private mortgage insurance: If you're not able to put down 20% of the purchase price, you may be required to pay private mortgage insurance (PMI). This can add a significant amount to your monthly payments.

So, while it is possible to get a 100% conventional loan, it's not easy. You'll need to have excellent credit, a low DTI, and meet income requirements. And even if you do meet all of these criteria, you may still need to pay PMI.

Alternative optionsIf you're not able to qualify for a 100% conventional loan, don't fret. There are other options available to you, including:

• FHA loans: These are backed by the Federal Housing Administration (FHA) and typically require a lower credit score and down payment than conventional loans.
• VA loans: These are available to veterans and their families and require no down payment.
• USDA loans: These are designed for rural homebuyers and offer 100% financing.

So, while a 100% conventional loan may be difficult to come by, there are other options available to you.

Mortgage Brokers Pro At Mortgage Brokers Pro , we specialize in helping people find the right mortgage for their needs. Whether you're looking for a conventional loan, an FHA loan, or another type of mortgage, we can help. Our team of experienced mortgage professionals will work with you to find the best loan option for your unique situation. Contact us today to learn more!

Other posts about conventional

• How much equity do I need to refinance to a conventional loan? 2023-01-06 09:43:38/
• Can you get down payment assistance with a conventional loan? 2023-02-01 12:08:44/
• Is it hard to get a conventional home loan? 2023-02-13 15:27:19/
• Can you get sellers assist on a conventional loan? 2023-02-24 02:04:34/
• What is the maximum conventional loan amount in Florida? 2023-02-28 03:04:49/

View all blog posts