Conventional - Mortgage Home Loans - Colorado Springs
- 5% or more down payment required
- Requires good credit scores
- Will allow
a gift as your down payment
- With 20% down - NO PMI
- PMI can be waived when you have 20% equity
The dominant number of loans made in the conventional market use Fannie Mae and Freddie Mac guidelines
for conforming loans. The U.S. government bailout of Fannie Mae and Freddie Mac may affect both entities' underwriting guidelines
going forward, but no changes have been made yet.
Conventional loans are "conforming" if they are generally $417,000 or less
for a single-family home. Conforming loan limits can be higher in pricier regions of the country. For example, in such states as Alaska
and Hawaii, it's $625,500.
There are also established guidelines for borrower credit scores, income requirements and minimum
down payments. For example, most conventional loans require somewhere between 5 percent and 20 percent down.
Right now these
guidelines are changing frequently but you should have at least a 620 credit score. Anything below a 740 credit score will have some
additional fees which can be quite sizable for the lower scores.
Conventional loans can be conforming or nonconforming. Loans
above the lending limits set by Fannie Mae and Freddie Mac are called nonconforming or jumbo loans.
Most conventional mortgages
have fixed interest rates. Typical fixed interest rate loans have a term of 15 or 30 years. A shorter-term loan usually results in
a lower interest rate.
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