Conventional Loans in San Diego
A conventional loan is a mortgage loan that is not insured or guaranteed by the government. Conventional loans typically offer the best terms for borrowers with good to excellent credit and sufficient down payment or home equity. Conventional loans can have adjustable or fixed rates.
Conventional Loan Benefits
Benefits of a Conventional Loan include:
- Most competitive rate and lower costs for a borrower with good to excellent credit.
- The borrower and lender can negotiate certain loan fees.
- More affordable payment options when home equity or down payment is less than 20% due to the ability of most Lenders to cover the cost of Mortgage Insurance.
Who is Eligible for a Conventional Loan?
Below are some of the criteria for a Conventional Loan.
- Credit score – most lending companies require you to have a good credit score. However, guidelines vary so feel free to contact us to find out what options you have.
- Income requirements – your mortgage payment should not be higher than 31% of what you are earning on a monthly basis. In addition, your total monthly debt payments (student loans, car loans, etc.) should not be higher than 45% of what you earn monthly. We have programs that allow a borrower to qualify with higher ratios when they have strong compensating factors, such as strong credit and/or asset reserves.
- Down payment – the majority of loans require a down payment of 3% – 20% of the total loan.
- Documentation – you will be required to provide documentation to show income and the ability to pay such as proof of job history, legal residence, income stability, home address for the past 2 years, asset statements, pay stubs and income tax filings.