Conventional Loan Eligibility


A conventional loan tends to follow Fannie Mae and Freddie Mac guidelines. Banks and other financial institutions issue a conventional loan – sometimes referred to as ‘regular loans.” A conventional loan is privately backed – unlike the government-issued FHA, VA and USDA loans. Because it’s the banks that put their “necks on the line,” guidelines and eligibility requirements tend to be more stringent than some of the federal loan programs.

There are many advantages for those that qualify for a conventional loan. Call 732-845-1991 to learn more about why a conventional loan might be right for you.

Below are some of the general eligibility requirements of a conventional loan. Because each case is different, make sure to call us to determine if you qualify.

  • Credit scores
    Guidelines will vary – please contact me for details.
  • Income requirements
    Your mortgage payment cannot be more than 31% of your monthly gross income and your monthly debts (house, car, student loans, etc.) cannot exceed 45% of your monthly gross income.
  • Down payment
    Most loans require between a 3% and 20% down payment. Mortgage insurance may be an option for those who cannot put down the full 20%.
  • Documentation
    You’ll need to provide proof of your:
    • income stability
    • job history
    • residences from the past two years
    • income tax filings
    • paystubs

(This is just an initial list of paperwork that will need to be provided. Based on your income, assets, liabilities and profits more paperwork may be requested.)


Also, if you are not a U.S. citizen, residency or visa paperwork may be required.

Why such a big process to apply for a conventional loan?

If you think about it – the banks are taking a big risk to loan you enough money to buy a house. They receive thousands of applications each week from hopeful homeowners and investors requesting to borrow funds. To determine who is likely to repay the loans, the banks must set eligibility requirements. Unlike the FHA, VA loans and USDA loans that are backed by the government, there is more risk to the private lenders when they issue a conventional loan. Therefore, stricter guidelines apply.

While a conventional loan may have the strictest eligibility guidelines, they often prove to be the most advantageous loan option for those who qualify.

The conventional loan experts at Fairway Independent Mortgage Corporation will be with you step-by-step to walk you though the process. If there is any way that you may be eligible for a conventional loan, they will make it happen.

To learn more and see if you meet conventional loan eligibility requirements, contact me at 732-845-1991.


           



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Copyright ©2018 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-877-699-0353. All rights reserved. Licensed by the NJ Department of Banking and Insurance. Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. A pre-qualification is not an approval of credit and does not signify that underwriting requirements have been met. Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation which has not been reviewed by Underwriting. Final loan approval is subject to a full Underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, and income information, and a satisfactory appraisal. 

Complaints may be directed to: (877) 699-0353 or Email us: customerservice@fairwaymc.com