We've been in business since 1989 doing home loans in Georgia and Florida. As of April 2021, we are licensed for residential mortgages in Iowa.
This is the most widely used loan program and is typically favored by the seasoned buyer. The advantages to this loan is the lower mortgage insurance (MI) rate if your down payment is less than 20% OR no MI if your down payment is 20% or more.
Conventional loans are commonly used for refinancing a mortgage. If you have an FHA loan, you must refinance to a conventional loan once your mortgage reaches 20% equity to drop the mortgage insurance. As long as you have an FHA loan, you will pay mortgage insurance.
Call us about our JUMBO LOAN programs. 10% down payment with no mortgage insurance programs are available if you qualify. More information on our jumbo loans coming soon.
Conventional loans require:
1. If you have an FHA loan.
If your current mortgage is FHA and you have 20% equity in your home value, you MUST refinance to a conventional loan to drop the mortgage insurance. As long as you have an FHA loan, you will be charged for mortgage insurance no matter the equity in your home.
2. Rate and term refinance.
With interest rates historically low, it's a good idea to review your current interest rate. Most people can save a full 1% by refinancing. Do you have 22 years left on your mortgage and you don't want to extend the term? You don't have to. Check out 15, 20, or 25 year terms.
3. Cash out refinance.
Low interest rates along with equity in your home means you have money sitting in your house that could be working for you. Want to buy a car or remodel your home? Take cash our of your home and pay your self back with lower interest rates than you'd get from a car dealer or a bank.
With all refinances, your will have costs of the loan and your escrow account to fund. These costs can be added to the loan amount so you pay nothing out of pocket.
A jumbo loan is a mortgage used to finance properties that are exceed the conventional conforming limit of $548,250, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the limit require a jumbo loan.
Underwriting criteria for jumbo loans are stricter because the loans are larger and riskier for lenders.
Lenders may require your FICO score to be higher than 700, and sometimes as high as 720, to qualify for a jumbo loan.
Lenders will also consider your debt to income ratio (DTI) to ensure you don’t become over leveraged. Depending on the lender, a DTI of 45% and below is generally accepted, however, some lenders may allow higher DTI ratios.
You’re more likely to be approved for a jumbo loan if you have ample cash in the bank. It’s not uncommon for lenders to ask jumbo loan borrowers to show they have enough cash reserves to cover one year of mortgage payments.
Expect to pay higher fees and slightly higher interest rates. The larger the loan, the more risk to the lender.